日本货币政策观察：基础政策修订是进步但仍存担忧

Basic Policy revisions: A step forward,but concerns remain Kentaro Koyama, Ph.D.Chief Economist+81-3-6730-0683 Reports of revisions to the Basic Policy's monetary policy section The Asahi, Mainichi, and Nikkei newspapers have successively reported that thegovernment is moving to revise the text concerning monetary policy in the currentdraft of its "Basic Policy." While the accuracy of these reports remains unconfirmedat the time of writing, we will examine their content and market implications. In the current draft, monetary policy is mentioned in two places (p. 2 and p. 34). [Original Draft, p. 2](DB's translation) To achieve a "strong economy," it is alsoextremely important that appropriate monetary policy management is conducted.The government will continue to work closely with the Bank of Japan as one, aimingfor sustainable economic growth under price stability without a return to deflation.We expect the Bank of Japan, while closely monitoring economic developments athome and abroad, to work in close coordination with the government in line withthe Bank of Japan Act and the spirit of the Joint Statement of the Government andthe Bank of Japan, and to achieve the 2% price stability target in a sustainable andstablemanner by conducting appropriate monetary policy management inaccordance with economic, price, and financial conditions, while confirming avirtuous cycle between wages and prices. [Original Draft, p. 34](DB's translation) This immediate economic and fiscalmanagement aims to realize a "strong economy," and to that end, it is extremelyimportant that it is accompanied by appropriate monetary policy management thatcontributes to "stable price increases." We expect the Bank of Japan, in line withArticle 4 of the Bank of Japan Act and the spirit of the Joint Statement of theGovernment and the Bank of Japan, to work in close coordination with thegovernment and conduct appropriate monetary policy management toward thesustainableand stable achievement of the 2%price stability target,whileconfirming a virtuous cycle between wages and prices. According to the reports, the opening of the section on page 2 is expected to bechanged as follows: [Revised Draft, p. 2 (based on reports)]To achieve a "strong economy," it isextremelyimportant that appropriate monetary policy management thatcontributes to "stable price increases" is conducted. 8 July 2026Japan Monetary Policy Watch The purpose of this revision is likely to avoid the misinterpretation that thegovernment is asking the BoJ to prioritize economic growth over price stability, asthe original text could be read as positioning a "strong economy" as the mainobjective and monetary policy as a means to that end. The revised proposal clarifiesa nuance that is consistent with the Bank of Japan Act: the BoJ's primaryresponsibility is price stability, and through its achievement, it contributes torealizing a "strong economy." We have previously viewed the fact that the initial draft's wording remainedunchanged, despite market concerns about the monetary policy section, as a signof a lack of two-way communication between the government and the market. If therevision is made as reported, we would consider it a positive step from acommunication perspective, as it would be a result of listening to the market'svoice. Bond market concerns that persist even after the revision Unfortunately, however, this revision alone is unlikely to completely dispel the bondmarket's concerns. Indeed, in today's bond market, JGB yields have risen across thecurve, with the exception of the 30-year sector which had an auction yesterday,suggesting that market vigilance has not eased. This is because problematicphrasing still remains in the text. We would like to point out the following two issues. First is the expression "price stability without a return to deflation." When thegovernment judges that Japan has exited deflation, it emphasizes the need toconfirm there is "no prospect of a return" to deflation. Therefore, there is no issuewith using this expression in the context of the government's own assessment ofdeflation. However, when used in a section expressing expectations for monetarypolicy, it gives the impression that the government is demanding that the BoJ clearan extremely high hurdle—that there be "no prospect of a return to deflation"—when judging the achievement of the 2% price stability target. Such a criterion doesnot appear in the Bank of Japan Act or the joint statement, and we believe it isinappropriate from the standpoint of respecting monetary policy independence. Second is the phrase "while confirming a virtuous cycle between wages andprices." Although the BoJ itself once used this expression, it has been absent fromits Outlook Report since April 2025 and was replaced in the July report with thephrase "a mechanism in which wages and prices rise moderately in interaction witheach other." While the BoJ has not provided a clear explanation for this change,