Dec. 20 – The Bank of Japan has been under pressure for years to revise its ultra-easy policy. Now, market participants say such a shift may be closer than ever.
After nearly a decade of interest rates at rock-bottom levels, the case for the BOJ to change its strategy is growing as price pressures intensify and BOJ Governor Haruhiko Kuroda nears the end of his term.
Adding fuel to the fire are reports that Prime Minister Fumio Kishida plans to revise the inflation agreement reached with the BOJ. Any clear move toward normalization could affect Japan’s dying bond market and set off a ripple effect around the world .
As traders grapple with a move by the world’s last super-dovish central bank to change its strategy, expect the yen to surge and yields to spike around the world.
