A key discussion point surfaced during recent BOJ deliberations: keeping real interest rates artificially suppressed relative to equilibrium levels can seriously warp resource allocation and derail long-term economic growth. Here's the thing—Japan's real policy rate currently sits at the lowest level worldwide. That's massive context. The reasoning behind rate hikes becomes crystal clear when you factor in currency-driven inflation pressures. When real rates fall too far below their natural equilibrium, capital flows get distorted, investment decisions get skewed, and sustained growth takes the hit. The BOJ appears to be recognizing this tipping point. As FX volatility continues feeding into inflation numbers across the board, tightening monetary conditions starts looking less like a policy choice and more like an economic necessity. For traders and investors watching cross-border capital flows, this shift in Central Bank thinking carries real implications.