The Bank of Japan will end its negative interest rate policy next year, according to nearly two-thirds of economists in a Reuters poll, with more now saying the central bank is inching closer to phasing out ultra-accommodative monetary policy.
BOJ Governor Kazuo Ueda is seeking to dial back the complex monetary stimulus deployed by his predecessor, but faces a challenging task of doing so without causing sharp and disruptive swings in capital markets.
A further 17 of 27, or 63%, expected the BOJ to end its negative rate policy, which has set Japan's short-term deposit rate at minus 0.1%, by the end of next year. That was up from 52% in a September poll and just 41% in August.Of the 17 economists who chose 2024, 10 identified the April 25-26 meeting for the end of negative rates, the poll found. Three opted for January, while two went for July, one selected March and another picked June.
UBS economist Masamichi Adachi said the BOJ will end negative interest rates at its April meeting after observing the results of next year's spring wage negotiations. He says its goal of stably achieving the 2% inflation target will be met in fiscal year 2026. "The current prolonged period of above-target inflation provides the Bank a window of opportunity to finally get rid of ultra-loose monetary policy. We expect negative interest rates to end in January 2024 and yield curve control to be ditched in July 2024," said Marcel Thieliant at Capital Economics.
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