Posted 1/22/2024, 11:19:14 PM
BOJ Hints Negative Rates Exit May Be Near as Conditions for Phasing Out Stimulus Improve
- BOJ signals growing conviction that conditions for phasing out stimulus are falling into place, suggesting an end to negative rates is nearing
- BOJ Governor gives no hints on timing of rate hike but says likelihood of sustaining 2% inflation target is gradually increasing
- Hawksish tilt pushes up yen and Japan's short-term yields as investors price in higher chance of negative rate exit in March or April
- BOJ leaves ultra-easy policy unchanged for now, but outlook report newly adds phrase that likelihood of hitting 2% target has continued to rise
- BOJ head stresses ending negative rates won't automatically lead to aggressive hikes seen elsewhere; monetary policy will remain accommodative