All eyes will be on Bank of Japan Deputy Governor Shinichi Uchida on Tuesday as he steps into the role of the central bank's primary communicator, tasked with the significant responsibility of clarifying its latest decision and future policy direction.

As a key policy architect for the BOJ over the past decade, Uchida will stand in for Governor Kazuo Ueda at the press conference, who was hospitalized last week with an infected liver cyst. Despite the governor's ongoing hospitalization, markets widely anticipate the BOJ will raise its benchmark interest rate to its highest level since 1995.

Uchida, who recently returned to work after months of treatment for leukemia, will lead the press briefing in Governor Ueda's absence. This marks the first instance since the enactment of the 1998 Bank of Japan Act where the governor has been absent from a policy decision announcement due to health reasons.

Investors will scrutinize Uchida's remarks for clues on the future path of interest rate hikes and the BOJ's stance on its bond purchase program. He faces a delicate balancing act: maintaining a sufficiently hawkish tone to prevent a sharp depreciation of the yen, while also considering Prime Minister Sanae Takaichi's preference for monetary policy to support economic growth.

Some economists suggest that a deputy acting in the governor's stead is unlikely to deviate from Ueda's established position to avoid controversy. Others note that Uchida's communication style is more direct, a contrast to Ueda's characteristically cautious, detailed, and objective approach.

Keiji Kanda, chief economist at Daiwa Institute of Research, believes Uchida may leverage his extensive policy experience to provide a well-considered explanation of the normalization process, aiming to enhance market participants' understanding of the central bank's thinking.

"I look forward to his perspective as a practical expert," Kanda stated, specifically highlighting that Uchida might comment on the BOJ's latest bond purchase plan. The central bank is expected to announce a halt to its tapering of bond purchases next April, marking another milestone in its policy normalization journey.

It remains unclear how explicitly Uchida will signal the bank's intentions during Tuesday's press conference. The event is designed to reflect the views of the BOJ's nine-member policy board. The central bank has previously indicated it expects Governor Ueda to attend the next meeting in July. The BOJ noted that Ueda will present his views to the policy board in writing but will not participate in the vote. Uchida will likely aim to minimize any statements that could be perceived as diverging from the governor's stance.