In addition to ending NIRP BoA expect the Bank to moved the celining on ints bond yield target from 0.25% to 0.5%.
Citing:
- “We expect pressure to bring forward normalization to grow over the coming quarters as the rising cost of food and energy potentially triggers backlash from households, resulting in reduced political support for the BOJ and its aggressive easing policies”
This goes directly against what Bank of Japan Governor Kuroda has said time and again - no tightening. BoA reckon Kuroda will be given cover to tighten by Fed and ECB tightening. And say other central bank moves reduce the risk of the yen moving higher. BoA say it'd be a one-off move (in October 2022) and a 'dovish hike'.
