The Japanese Dilemma

Part 2/3

by Macro D

This is the second part of the three-part series brought to you by our regular contributor and friend, Macro D. You can find the first part below. This couldn’t come at a better time, just as Ueda is seemingly preparing markets for an upcoming December rate hike, which has pushed Japanese 2-year government bond yields above 1% for the first time since 2008. When the BoJ hikes, volatility ensues, so it’s essential to understand the whole monetary and political context.

In the second part, we explore how Japan’s crossroads are rarely loud — they unfold in whispers, policy footnotes, and cautious sentences. The Bank of Japan now finds itself exactly there: between legacy and change, between the quiet patience of Kazuo Ueda and the assertive ideology of Prime Minister Sanae Takaichi.

Macro D revisits the central bank’s path from the age of Abenomics to the present — a journey marked by good intentions, quiet inertia, and, now, rising political friction. The question isn’t just whether Japan is behind the cycle. It’s whether the cycle itself still belongs to Japan.