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BOJ Watchers Shift Hike Forecasts

The number of watchers of the Bank of Japan is increasing, who are changing their forecasts regarding the termination of the policy of negative interest rates.

BOJ Watchers Shift Hike Forecasts

The position of the mentioned persons was influenced by several factors, including the remark of the head of the specified organization and the earthquake recorded on the northwest coast of the country on January 1.

BNP Paribas SA, Deutsche Securities, Mitsubishi UFJ Morgan Stanley Securities, and Morgan Stanley MUFG Securities have changed their forecasts regarding the prospects for ending the policy of negative interest rates, saying that the Bank of Japan at its meeting on January 22-23 will most likely decide to continue its current strategy of activity.

Governor of the Bank of Japan Kazuo Ueda stated the need to be careful about premature actions. Analysts also note that the earthquake that occurred on January 1 increased the uncertainty associated with the prospects for the development of the Asian country’s economic system.

Kazuo Ueda stated last week during a conversation with media representatives that he most likely would not have enough data to decide on the sub-zero rate policy by the January meeting of the financial regulator.

Kentaro Koyama, chief economist at Deutsche Securities for Japan, commenting on what the head of the central bank of the Asian country said, noted that the probability of abandoning negative interest rates has approached zero.

In early December, speculation about possible policy changes by the Bank of Japan intensified in the market. Last month, Kazuo Ueda said that his job would soon become more difficult. His deputy Ryozo Himino noted the benefits of raising interest rates. Against this background, expectations of a change in the policy of the Bank of Japan have increased in the market.

Naomi Muguruma, chief fixed income strategist at Mitsubishi UFJ Morgan Stanley, suggests that negative interest rates will be lifted in April. Ryutaro Kono, chief economist for Japan at BNP Paribas, agrees with this forecast.

As we have reported earlier, Bank of Japan Launches CBDC Pilot.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.