Japan's chief economist has stated that the country can maintain its anti-deflation strategy even if the BOJ phases out negative interest rates, according to a government official. Governor Ueda is examining the fate of ETF buying upon stimulus exit, and additional BOJ hikes are anticipated by some, as reported by @NikkeiAsia. Pimco foresees an end to negative rates in Japan potentially next month. BOJ Executive Director Shimizu has stated that accommodative conditions would persist even without negative rates, and BOJ's Uchida has outlined adjustments to the YCC to allow for greater yield movement, with bond buying expected to remain stable. Uchida noted that excess reserves incurred 0.1% interest prior to negative rates and the overnight call rate ranged from 0-0.1%. He also considers options for large ETF holdings, while J-REITS present a separate issue requiring further consideration. Uchida expects no significant changes and believes stopping ETF and J-REIT buying won't have a significant impact on markets, emphasizing communication and market operations to avoid financial market disruptions. It's hard to see the bank raising its policy rate continuously and rapidly even after the negative interest rate ends, and Uchida won't assess or comment on market perceptions of the future rate path. Terminating YCC does not imply a sudden stop in bond buying, and the BOJ's deputy has reassured that an accommodative policy will stay after the negative rate ends. Economic developments will determine whether the BOJ's balance sheet expands or contracts when stimulus is withdrawn. Uchida is also determining conditions for shifting policy, considering the most appropriate means and sequence, and has highlighted the importance of annual wage bargains in determining a positive economic cycle.
π΄ BOJ UCHIDA: ANNUAL WAGE BARGAINS CRUCIAL IN DETERMINING POSITIVE ECONOMIC CYCLE
π΄ BOJ'S UCHIDA: WON'T ASSESS OR COMMENT ON MARKET PERCEPTIONS OF FUTURE RATE PATH
π΄ UCHIDA OF BOJ SAYS ECONOMIC DEVELOPMENTS WILL DETERMINE WHETHER BALANCE SHEET EXPANDS OR CONTRACTS WHEN STIMULUS IS WITHDRAWN
BoJβs Uchida: BoJ Will Not Abruptly Stop Bond Purchases
π΄ BOJ'S UCHIDA: TERMINATING YCC DOES NOT IMPLY A SUDDEN STOP IN BOND BUYING
π΄ BOJ'S UCHIDA TO DETERMINE CONDITIONS FOR SHIFTING POLICY, WILL CONSIDER MOST APPROPRIATE MEANS AND SEQUENCE
Accommodative policy to stay after negative rate ends: Bank of Japan deputy https://t.co/N6BuEfIMaf
A top Bank of Japan official said itβs hard to see the bank raising its policy rate continuously and rapidly even after the negative interest rate is ended https://t.co/eDup7KvBZm
*BOJ'S UCHIDA: NO BIG MKT IMPACT EVEN IF BOJ STOPS BUYING ETFS let's find out
π΄ BOJ'S UCHIDA CONSIDERS OPTIONS FOR LARGE ETF HOLDINGS WHILE J-REITS PRESENT A SEPARATE ISSUE REQUIRING FURTHER CONSIDERATION.
π΄ BOJ'S UCHIDA: STOPPING ETF AND J-REIT BUYING WON'T HAVE SIGNIFICANT IMPACT ON MARKETS
π΄ BOJ'S UCHIDA: ADJUSTMENT TO YCC TO ALLOW FOR GREATER YIELD MOVEMENT, BOND BUYING TO REMAIN STABLE
π΄ BOJ'S UCHIDA: EXCESS RESERVES INCURRED 0.1% INTEREST PRIOR TO NEGATIVE RATES; OVERNIGHT CALL RATE RANGED FROM 0-0.1%
π΄ BOJ'S UCHIDA: COMMUNICATION AND MARKET OPERATIONS TO AVOID FINANCIAL MARKET DISRUPTIONS
π΄ BOJ'S UCHIDA EXPECTS NO SIGNIFICANT CHANGES
π΄ BOJ'S UCHIDA: JAPAN'S REAL INTEREST RATE DEEPLY NEGATIVE, MONETARY CONDITIONS VERY ACCOMMODATIVE
π΄ BOJ EXECUTIVE DIRECTOR SHIMIZU: ACCOMMODATIVE CONDITIONS WOULD PERSIST EVEN WITHOUT NEGATIVE RATES.
Pimco sees an end to negative rates in Japan potentially next month https://t.co/KIXk66WXP9
Additional BoJ Hikes Seen By Some Once Negative Rates End - @NikkeiAsia https://t.co/Tpafo7Pxw2
BOJ to examine fate of ETF buying upon stimulus exit -Gov Ueda https://t.co/gz5LUJbfRz
Japan can retain deflation-fighting mandate even if BOJ ends negative rates -govt official https://t.co/f82cpS5nOS https://t.co/c0gDLp9Gb3
Japan can retain its decade-old blueprint focusing on efforts to beat deflation even if the central bank were to phase out its massive stimulus with an end to negative interest rates, the government's chief economist has said. https://t.co/FsiAZipa2v