Straight talk is meant to be core to credible economic strategy.
To be effective in steering the ship, central banks want great store to be placed in what they say, not just what they do. Officials have strived the past two decades to refine this guidance — albeit with some missteps along the way. Artistry appears to have deserted the Bank of Japan.
One of the most striking aspects of Wednesday’s monetary policy meeting at the BOJ wasn’t that interest rates and key settings were kept near zero. That was widely predicted. The defining feature of forecasting and markets in the final months of Haruhiko Kuroda’s governorship is the lack of conviction in projections about what the bank will do from one decision to the next. There’s a believability deficit. That’s why the formal calls from economists in Tokyo these days are laced with skepticism about the bank’s intentions.