Why Do BOJ Policy Changes Move the Markets? | Column 6: Yuto and the BOJ ②

1. Why the Market Moves on "Anticipation" | How Prices Shift Ahead of the Headlines

The way the market prices in the future is a fundamental mechanism common across stocks, foreign exchange, and bonds. News regarding the Bank of Japan's monetary policy and interest rates is particularly prone to triggering early market reactions, making it a common point of confusion for beginners. Markets do not wait around to move until after official announcements are made. Often, the mere **anticipation (prediction)** that "something might happen" gets reflected in asset prices well in advance.

Interest rates may not have changed yet. Even so, the moment a general sentiment spreads that "they are likely to change," exchange rates and stock prices react ahead of time.

The market constantly tries to bake tomorrow's news into today's price. When anticipation mounts too high and reality fails to catch up, a sharp market correction usually follows.

2. How a Change in the BOJ Governorship Impacts the Market | The Pricing-In Mechanism

Following the four impacts discussed in Part 1, the fifth major influence is a **"change in the governorship."** A transition in the BOJ leadership is a theme the market reacts to with extreme sensitivity, as it has the potential to dictate the future trajectory of interest rate policies. Speculative movements can influence prices long before any official announcements hit the press, driven by the question of "who will be the next governor."

⑤ Changes in the BOJ Governorship and Market Sentiment

The term of office for the Governor of the Bank of Japan is five years, and re-appointment is possible. Haruhiko Kuroda served as governor for two terms, spanning a total of 10 years.

The current governor, Kazuo Ueda, has now crossed the 2.5-year mark, passing the midpoint of his term.

As a shift in the BOJ leadership draws closer, the market frequently displays anticipatory behavior focused on "what comes next."

For a retail investor like myself, there is almost no practical reason to obsess over who the next candidate might be.

The only vital thing to understand is that the moment candidate names are floated in the political sphere and begin appearing in the headlines, **"the market naturally inherently behaves to price that information in early."**

3. Should Retail Investors Make Market Predictions? | A Long-Term Investing Perspective

Short-term market forecasting is notoriously difficult even for seasoned professionals, and when retail investors try to chase these trends, their investment core easily gets derailed. In long-term investing, "building a reliable system" is far more critical than "making predictions," and your distance from the noise directly shapes your results. Because my asset-building style centers entirely on a long-term, diversified, and recurring approach, I see absolutely no need to try and become a market prophet.

Consuming vast amounts of news does not automatically translate into investment success. If you let yourself ride an emotional roller coaster over every statement from the BOJ, your core investment foundation will quietly begin to waver before you even realize it.

I certainly observe and feel the market's movements. However, I choose not to chase them. I simply watch them pass by.

4. Designing a Portfolio Immune to Anticipation | The True Meaning of Long-Term, Diversified, and Recurring Allocation

In my view, a long-term, diversified, and recurring investment strategy is not a tool designed to successfully "time" the market. Rather, it is a deliberate system built to protect you from being swayed by collective anticipation and anxiety. By creating a framework that assumes price volatility from the outset, you dramatically lower your psychological burden. Doing so makes it significantly easier to maintain your consistency.

To put it simply, because you do not trade on anticipation, you can keep going. And because you keep going, you can quietly reap the rewards of global economic growth over time.