📝Expect BoJ to Wind Down NIRP Sometime Jan-Mar 2024: MUFG Strategy

We expect the BoJ will wind down both NIRP and the policy framework for controlling the 10-year JGB yield sometime in Jan-Mar 2024. We think it could decide that the likelihood of achieving the desired price outlook has "risen sufficiently" as early as the January 22-23 meeting. Although the final decision will be made by the Policy Board, the Bank will probably continue preparing the markets through December and early January so that an early announcement does not come as a complete surprise. The results of the December Tankan survey will be published on December 13. The Policy Board will then meet on December 18-19, and Governor Ueda is scheduled to give a speech at the Meeting of Councillors of Nippon Keidanren (Japan Business Federation) on December 25. We will be watching closely to see whether the Bank hastens its preparations for an exit in view of newly emerging information and data. If Governor Ueda were to say that the likelihood of realizing the price outlook had increased "a little more" since the October Board meeting, we would view that as an indication that the Bank was entering the final stages of a decision. - MUFG Strategy