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While none of 26 economists predicted changes in the upcoming December BOJ meeting, many foresaw the negative rate policy, which has set Japan's short-term deposit rate at minus 0.1%, would reach the end of the line next year. In the Nov. 15-20 poll, 22 of 26, or 85%, of economists said the BOJ would end the policy by the end of next year. Having watered down YCC, the BOJ's next focus is to end its negative interest rate policy and push short-term rates to zero, sources previously told Reuters. Close to 85% of poll respondents forecast the BOJ would end its YCC policy, while the rest said it would tweak the scheme again, the poll found. EYES ON NEXT YEAROf 22 economists in the poll who chose 2024 for the end of negative rates, more than a half, 12, opted for the April 25-26 meeting.
Persons: Issei Kato, Kazuo Ueda, Mitsubishi UFJ, Mitsubishi UFJ Morgan Stanley, Hiroshi Namioka, Namioka, Fumio Kishida's, Chiyuki Takamatsu, Satoshi Sugiyama, Veronica Khongwir, Sujith Pai, Sam Holmes Organizations: Bank of Japan, REUTERS, Rights, Bank of, Reuters, Capital, Research Institute, Mitsubishi, Mitsubishi UFJ Morgan, Mitsubishi UFJ Morgan Stanley Securities, D, Management, Fukoku Mutual Life Insurance, Thomson Locations: Tokyo, Japan, Bank of Japan
Only one of 22 economists, or 5%, expected the BOJ to start unwinding its ultra-easy policy this year, the Aug 15-23 poll found, significantly down from 50% in a July survey. Four said the BOJ will start unwinding in January-March 2024, five chose April-June, six selected July-September and another six opted for October-December. A separate question showed 73% of economists expecting the BOJ to end YCC next year, up from 50% in July. A question about when the BOJ ends its negative short-term interest rate policy showed 41% of economists anticipating it in 2024, down from 54% in a May poll. Economists raised their projection for Japan's fiscal 2023 GDP growth to 1.8% from 1.1% in the previous poll.
Persons: Issei Kato, Takumi Tsunoda, YCC, Kazuo, Ueda, Hiroshi Namioka, Kantaro Komiya, Satoshi Sugiyama, Susobhan Sarkar, Shri Navaratnam Organizations: Bank of Japan, REUTERS, Rights, Shinkin Central Bank Research Institute, D, Management, U.S, Thomson Locations: Tokyo, Japan
"Japanese companies will issue their outlook for 2023 by May, which will be based on the current macro environment. So the forecast will be conservative," said Hikaru Yasuda, chief equity strategist at SMBC Nikko Securities. "But as the environment is not as bad as companies (now) expect, they will slowly raise their forecast towards the end of the year." "Companies whose businesses are linked with China are expected to perform well," said Hiroshi Namioka, chief strategist and fund manager, T&D Asset Management. "Japanese equities are undervalued due to caution for the currency movement," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
Bank of Japan makes surprise policy tweak
  + stars: | 2022-12-20 | by ( ) www.reuters.com   time to read: +8 min
ATUSHI TAKEDA, CHIEF ECONOMIST, ITOCHU ECONOMIC RESEARCH, TOKYO:"Today's move reflects the BOJ's determination not to alter its yield cure control policy. CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:"I think the move was certainly unexpected, to say the least. MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE:"They've widened the band, and I guess that came earlier than expected. CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:"The timing of the policy tweak is a surprise, though we have been expecting the move to come in 2Q 2023. "The tweak may seem modest but is significant for a central bank that has held dovish for a long time.
Bank of Japan reviews yield-curve control policy
  + stars: | 2022-12-20 | by ( ) www.reuters.com   time to read: +4 min
Dec 20 (Reuters) - The Bank of Japan has slightly loosened the shackles on its 10-year yield target and said it will review its yield-curve control policy, surprising financial markets and sending the yen sharply higher. However, it is only a first step and yield-curve control (YCC) remains in place, as does negative rate strategy. CAROL KONG, CURRENCY STRATEGIST, COMMONWEALTH BANK OF AUSTRALIA, SYDNEY:"I think the move was certainly unexpected, to say the least. MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE:"They've widened the band, and I guess that came earlier than expected. CHRISTOPHER WONG, CURRENCY STRATEGIST, OCBC, SINGAPORE:"The timing of the policy tweak is a surprise, though we have been expecting the move to come in 2Q 2023.
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