[Bank of Japan Decision Meeting Preview] Interest rate hike observations in January have disappeared, and attention is there any suggestion for “April negative interest rate cancellation” that will change the trend of yen depreciation

The Bank of Japan will hold its first monetary policy meeting of the year from 22nd to 23rd. The details of the decision will be announced around noon on the 23rd, and a press conference by President Ueda Kazuo is expected to be held in the afternoon. It was in someObservations of monetary policy revisions, such as the cancellation of negative interest rates, almost completely disappeared due to the Noto Peninsula earthquake that occurred on the 1st. The market outlook is converging to the April interest rate hike, and combined with the retreat in early US interest rate cut observations, it is currentlyAs the depreciation of the yen progresses, will Governor Ueda send a new message to change the trend of depreciation of the yenAttention is drawn to

The Noto Peninsula earthquake pushed the status quo maintenance forecast to the downside
A questionnaire survey of “Bank of Japan Watchers” analyzing monetary policy by the Nihon Keizai Shimbun dated 18th and an economist survey by Bloomberg on the same date, bothAlmost everyone expects monetary policy to maintain the status quoDoing it.
As of the end of last year, the Bank of Japan's January policy revision observations had already receded. Governor Ueda stated in his lecture at the Federation of Economic Organizations on 23/12/25 that “(the accuracy of the 2% price stability target) is still not high enough at the moment,” and “I don't think (the cancellation of negative interest rates in 24) is conclusively zero, but I expect next year (24) to be in a situation where a virtuous cycle of wages and prices can be foreseen” in an NHK interview reported on the 27th.
In addition to these statements, the view that it is difficult to lift zero interest rates at an early stage has become decisive due to the Noto Peninsula earthquake that occurred on January 1 this year.

The dollar yen rate temporarily hit the first half of the 140 yen range at the end of December, and then turned into full-scale depreciation in the yen from 1/2, and progressed to the latter half of the 148 yen range on the 19th, as a sign of this change in perspective and the retreat of early interest rate cut observations in the United States.

Are price and wage trends insufficient to support interest rate hikes?
At the previous December meeting where it was decided to maintain mitigation policies, forward guidance, which is the policy guideline for the future, has not changed. According to the “main opinions” of the policy committee announced on December 27, it seems that there were many “cautious” opinions, such as “at present, we have not reached a situation where we can predict the sustainable and stable implementation of the 'price stability target' with sufficient accuracy” and “at least it is not too late to judge after looking at trends in wage negotiations next spring (spring 24).” On the other hand, there was also an opinion that “we should aim for financial normalization without missing the timing.”

Even after the beginning of the year, there have been no major changes in price and wage trends, which are the keys to policy revisions. The December national consumer price index (core CPI excluding fresh food) announced by the Ministry of Internal Affairs and Communications on 1/19 rose 2.3% from the same month last year and shrunk for 2 consecutive months, resulting in a low growth rate since 22/6 (2.2%). Service prices, which Governor Ueda emphasizes in determining whether wage increases are reflected in prices, rose 2.3% and remained in the 2% range for 6 consecutive months, but the growth rate remained flat from the previous month.

Bloomberg on the 12th reports that consumer prices for fiscal year 24 (core CPI excluding fresh food) and economic growth rate forecasts for fiscal year 23, which will be discussed at the January meeting, are likely to be revised downward. The reduction in the price forecast for fiscal year 24 is to reflect the decline in crude oil prices, etc., and it is expected that it will be lowered to around 2.5% from the previous 2.8%.

Regarding wage increases, it seems that there are not enough materials to support interest rate increases. At the branch manager meeting held by the Bank of Japan on the 11th,”There were many reports that there was high uncertainty about the spread and extent of wage increasesIt's called” (Bank of Japan “Report at Branch Manager Meeting”), and the Nihon Keizai Shimbun dated the same date is “(Report at the Branch Manager Meeting)It seems that it was not a decisive blow towards financial normalization” it was reported.

As the depreciation of the yen progresses, is there any suggestion from Governor Ueda regarding the “cancellation of negative interest rates in April”
Meanwhile, Bloomberg dated 18th said, “According to the person concernedThe Bank of Japan is generally optimistic about wage increases this yearThat's it. There is a big possibility that they are strengthening the perception that the accuracy of achieving price targets is steadily increasing.”
At the momentThere is a tendency in the market to think that the Bank of Japan will decide to cancel negative interest rates at the April meeting. According to Bloomberg's economist survey, 30 out of 51 people expected negative interest rates to be lifted at the April meeting. Even in the “Bank of Japan Watcher Survey” of the Nihon Keizai Shimbun, 18 out of 23 people answered “April to June.”
Therefore, market attention has been narrowed down to whether there is any suggestion regarding the cancellation of negative interest rates in April at the current January meeting.
Mari Iwashita, chief market economist at Daiwa Securities, said in a report,”Pay attention to whether there are any new messages for the next March or April meetings where the data will be collectedIt is said that they are doing” (Bloomberg, 19th). Also, Ishida Takeshi, a foreign exchange strategist from the Resona Holdings' Market Planning Department,”Since the depreciation of the yen has progressed more than expected and negative interest rates are expected to be lifted in April, it is expected that gradually positive nuances about interest rate hikes will come out from Governor Ueda from the current Bank of Japan meetingIt's called” (same).
Meanwhile, Okumura Tsutomu, senior interest rate strategist at SMBC Nikko Securities, said in the report, “If there is a statement that 'the accuracy of achieving price targets is not sufficient, but it is increasing, 'it is easy for the market to strengthen the view that the Bank of Japan will make a decision at the April meeting after the Spring Battle.Even if Governor Ueda simply communicates that are not much different from before, there is a possibility that it will trigger a rebound in interest rates” is being analyzed (Bloomberg, 18th).