Rejoicing in its busiest ever year of visitors, Japan has begun to fret about overtourism. It is tangled on whether two-tier pricing, with one price for foreign visitors and a lower one for locals, is desirable, discriminatory or self-destructive. Rather than escaping it all, a once-footloose nation is opting to stay put, anchoring Japanese overseas travel at a mere 60 per cent of pre-Covid levels.

But somewhere in all this, the right crisis — one of negative terms of trade and currency vulnerability — has at last been identified. The run-up to this week’s Bank of Japan monetary policy meeting was messy; but the message the central bank transmitted on the yen was clearer and more honest than it has been for a long time. For all the BoJ’s reference to an intensifying virtuous cycle between wages and prices and its previous commitment to moving only if the data justified it, the decision to raise the benchmark interest rate to 0.25 per cent was hardly a no-brainer. 

Two members of the monetary policy committee dissented, with one directly questioning whether the economic data yet supported an increase. Some analysts have already suggested Wednesday’s move may be remembered as one of the BoJ’s most controversial in recent times; the chief Japan economist at UBS described it as “very disappointing”, warning that it made the already precarious normalisation of Japan’s economy even more so.