The Bank of Japan will cancel YCC and exit negativ

Ai Hui Cha, October 12th: Naomi Mugurum, Chief Fixed Income Strategist at Mitsubishi UFJ Morgan Stanley, has revised her main vision for the Bank of Japan's monetary policy, predicting the cancellation of YCC and negative interest rates at the January 2024 meeting. The main reason for the revision is that the Bank of Japan is increasingly confident in its ability to achieve a "positive income expenditure cycle" and a "virtuous wage price cycle". Muguruma took into account the view expressed by members of the Bank of Japan's Policy Committee that the sustainability of wage growth can be judged before the results of next spring's labor negotiations are announced. Even if the Bank of Japan has sufficient information and data to make a decision, it will not forcefully decide to cancel the negative interest rate policy at its January meeting if long-term interest rates are unstable.