(Bloomberg) -- The Bank of Japan’s unexpected scheduling of speech and press briefing before its January meeting has increased market expectations for a rate hike next month instead of December.
The central bank’s Deputy Governor Ryozo Himino will be giving a speech to local business leaders in Yokohama followed by a press conference on Jan. 14, the BOJ said Monday. The move is unusual, as board members haven’t held this kind of event before the first policy meeting of the year at least since former Governor Haruhiko Kuroda began his term in 2013.
By scheduling Himino’s event before the January meeting, the BOJ will have a solid opportunity to telegraph its thinking on monetary policy before a gathering where an increasing number of economists are forecasting a rise in borrowing costs. The yen accelerated its drop against the dollar following news of the event, in a sign that the market is now betting on a lower likelihood of a hike this month.
“The BOJ is always making efforts toward more effective communication,” the BOJ public relations division told Bloomberg Tuesday. From here on the bank will make the scheduling of regional speeches more balanced, and announce them at the earliest time possible, it said.
The rare scheduling move comes after Governor Kazuo Ueda indicated regret over a lack of communication opportunities ahead of the bank’s July policy meeting. That’s when the BOJ raised rates and came under fire for the surprise action that set the stage for a global market crash.
The central bank concludes its next two-day policy meeting on Dec. 19, with the decision after that coming on Jan. 24. More than 80% of BOJ watchers expected a rate hike by January, according to a Bloomberg survey conducted ahead of the October policy meeting.
Traditionally, at the start of each year the BOJ governor speaks briefly at various new year events held by banking groups, with some board members also talking at special gatherings from time to time. But the BOJ hasn’t scheduled a set-piece speech to local business leaders combined with a news conference in January for more than a decade.
The regional speech format generally gives more free rein for board members to show their thinking on monetary policy, giving the central bank an opportunity to let market participants adjust expectations. Citigroup now expects the BOJ to raise its benchmark rate from 0.25% in January, shifting its forecast from December, according to a report Monday by economist Katsuhiko Aiba.
(Updates with comments from the BOJ.)
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