BOJ to end NIRP and YCC, “a done deal” – here’s what might be a dovish surprise

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
  • “If they keep it, it will be a dovish

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.

This article was written by Eamonn Sheridan at Source