On March 30, according to Barclays, the Bank of Japan may start normalizing its ultra-loose monetary policy in June, first by adjusting its yield curve control and then ending its negative interest rate policy. The Bank of Japan may shorten the target of yield curve control and then move from negative interest rate policy to zero interest rate + forward guidance, strategists including researcher Tetsufumi Yamakawa wrote in a report that the Bank of Japan may end its negative interest rate policy in autumn , but is unlikely to raise rates above zero before mid-2024.
Given the fastest wage growth in nearly 30 years, more sticky inflation, the Fed‘s tightening cycle, and an improving domestic political environment, a Bank of Japan rate hike is likely and should support the yen, with USD/JPY expected to Will fall towards the 120-125 range before the end of the year.
