ANZ Bank looks forward to the BOJ’s interest rate decision: no action

June 16, ANZ economists said we expect the Bank of Japan to keep its policy setting unchanged at this week’s meeting. With improving functioning of the JGB market and weak wage growth, the BOJ has little incentive to make changes. We maintain that the impetus to change the current policy stance of negative interest rates and yield curve control (YCC) will come from its negative impact. We expect the BoJ to reduce its target government bond maturity from 10-year to 2-year at a future meeting. The BOJ may abandon the YCC around the time it completes its full review of monetary policy.