Ueda Kazuo has made a big move. The Governor of the Bank of Japan has recently adopted an unusually firm tone— with the 2% inflation target now within reach, the rate hike arrow is already on the bow.

At the Economic and Social Research Institute meeting, he gave a clear signal: "Wages and prices are rising moderately, and the timing to achieve the target is steadily approaching." This may be his last major public appearance of the year, but it sends the strongest policy signal. More importantly, corporate pricing models have undergone a complete transformation, and the Japanese economy is bidding farewell to the three-decade-long normal of "zero growth."

Last week, interest rates just reached their highest point since 1995, but Ueda’s tone indicates that this is far from over. As long as the economy progresses as expected, further tightening is inevitable. The market is holding its breath—could the next rate hike be just around the corner?

What’s more, the yen experienced a sharp plunge last Sunday. This time, he deliberately took a tough stance to stabilize the currency market, with Finance Minister Shunichi Suzuki even warning speculators—intervention could happen at any moment. Japan holds $13 trillion in foreign exchange reserves, but how many rounds can this money sustain during intervention? No one knows for sure.

On the other side, Prime Minister Sanae Sato is under pressure from the cost of living crisis—public anger has led to the Liberal Democratic Party’s consecutive election defeats. She is calling on companies to raise wages to outpace inflation. But the reality is harsh: if the yen continues to depreciate, inflation will worsen further, and the central bank may be forced to act prematurely.

This is a high-stakes gamble. Can Japan’s economy truly break through and end the era of "zero growth"? The situation has entered the most critical showdown.