key takeaways
- The Bank of Japan (BOJ) announced a second interest rate hike as well as a plan to taper government bond purchases on Wednesday, 31 July.
- Through the BOJ’s actions Wednesday and its openness to further rate hikes, Governor Ueda Kazuo decisively asserted the bank’s independence and signaled that a new macroeconomic policy environment has arrived.
- This shift was enabled by a post-Abenomics shift in the Liberal Democratic Party (LDP) and will encourage further shifts within the party in favor of monetary and fiscal hawks.