This is another one of those things I can't understand: the question of whether the BoJ will raise its key interest rate next week or at the next meeting on April 26. It's not the ‘when’ that matters. Two completely different questions matter: whether the policy rate will be raised at all in the near future, and whether there will be a significant number of rate hikes thereafter, or whether it will be a disaster like 2000 and 2006, when ‘monetary policy normalization’ fizzled out after the first steps.

The second question – what will follow after a first rate hike – is much, much more important. If the BoJ were to raise its key interest rate to 0% or +0.1% next week, this would in itself be irrelevant for inflation and the real economy, as well as for the JPY exchange rate. Such a move is only relevant if it can be seen as the start of a cycle of rate hikes.