Shoki Omori, Deutsche Securities' chief Japan fixed-income strategist, said the
BOJ now judges underlying/core inflation has reached 2%, marking a shift in its
policy objective from trying to raise inflation to preventing it from running
hot. That alters the BOJ's reaction function and warrants market re-pricing. An
8-1 vote and a board member's push for a rate rise reinforce the change. Markets
are shifting discussion from when the next hike will occur to where the policy
rate will ultimately settle.
