Nomura says that a Bank of Japan exit from its negative interest rate policy (NIRP) and yield curve control (YCC) tomorrow is "basically a done deal".
Adding that the only uncertainty is whether the central bank keeps its commitment to expanding the monetary base:
- "A lot of people expect that to be dropped, myself included"
- "If they keep it, it will be a dovish surprise."
Also, on JGB yields falling, comments from Mizuho Securities:
- "It's kind of buy the fact," said Shoki Omori, chief Japan desk strategist at Mizuho Securities. "All the information is basically out, so people are no longer scared about what the BOJ will do tomorrow." While the 10-year yield may jump above 0.8% initially following the BOJ policy decision, demand for bonds from life insurers and other long-term investors into Japan's fiscal year-end this month could push it as low as 0.7% ultimately, Omori said.
Info via Reuters report.
Bank of Japan Governor Ueda will hand down the board's decision next Tuesday sometime after 0230 GMT.
Bank of Japan
