The report says that policymakers are starting to warm up to the idea of tweaking its infamous yield curve control (YCC) settings later this year but will likely keep policy unchanged at next week's meeting. It is believed that they are still waiting for more evidence of sustained wage growth, despite the positive shunto negotiations last month.
One of the sources mentioned that it is still appropriate to maintain the ultra-loose monetary policy stance for now, a view also echoed by two other sources in the report.
However, if the recent wage dynamics continue to be sustained, that could prompt a shift in the central bank 's approach later in the year with the sources saying that policymakers are emboldened by the results of the shunto negotiations. Adding that there is scope to debate a policy tweak possibly in the coming months.
As mentioned previously, the groundwork has already been laid out for Ueda to take steps in moving away from the current monetary policy stance held by the BOJ. It isn't likely to be immediate but expect that if there are any firmer hints to follow, that will be a yen positive in the bigger picture.