BOJ's hawkish pivot signals tighter monetary policy ahead.

BOJ's hawkish pivot signals tighter monetary policy ahead. Bank of Japan board member Hajime Takata warns policymakers must prevent inflation from overshooting as Japan emerges from decades of deflation. With the 2% inflation target effectively met, the central bank's focus shifts from fighting deflation to controlling price acceleration. Takata, the BOJ's most hawkish member, advocates for gradual interest rate increases, having previously proposed raising rates to 1.0% in January, a move rejected by the board majority. December saw the policy rate climb to 0.75%, the highest in three decades. Takata's concerns center on entrenched inflation expectations and rising medium-term price pressures that could trigger wage-driven second-round effects.