That is despite prime minister Takaichi’s reported reservations and reluctance in wanting the BOJ to get on with the next rate hike so soon.
In terms of market pricing though, traders are not seeing any potential for a policy change on 19 March next month. The odds of there being no change to the policy rate are at ~87% currently. The following meeting on 28 April will be more interesting, with traders pricing in ~54% odds of a 25 bps rate hike.
It’s all going to ride on the spring wage negotiations and then seeing if Ueda & co. will have the appetite to deliver on another rate hike before Takaichi’s choice of replacement board members step in.
As a reminder, we will be seeing Asahi Noguchi and Junko Nakagawa depart from the central bank at the end of March and June respectively. They will be replaced by Toichiro Asada and Ayano Sato, both of whom are likely to shift the internal debate at the central bank and stall further rate hikes.
For some context, Noguchi – while being a dovish member – still sided with the last two rate hikes while Nakagawa is more of a consensus voter in keeping the peace
