The latest policy meeting of the Bank of Japan sent an important signal. This round of rate hikes is not a sign of tightening policy, but rather a slight adjustment towards normalization of the financial environment — the loose liquidity pattern remains unchanged. The market should not over-interpret this; it is simply the central bank's cautious response to economic recovery.

The future policy direction has no predetermined script. The decision-makers at the central bank explicitly stated that they will fully follow the data trends and will not preset a timetable or rhythm for rate hikes. This means that global financial markets still need to closely monitor real-time economic data, especially labor market and price movements.

Among the most noteworthy is the interaction between wages and inflation. The current wage increase momentum is positive, increasing the likelihood of a positive feedback loop in inflation spirals. However, the central bank remains restrained — as long as there is uncertainty in the data, policy will stay put. This data-driven flexible approach is reshaping global liquidity expectations.