[Bank of Japan Decision Meeting Preview] Will the cancellation of negative interest rates raise interest rates for the first time in 17 years, or will there be an impact on ETFs held by the Bank of Japan equivalent to 7% of Japanese stocks
The Bank of Japan will hold a monetary policy meeting from 18th to 19th. The details of the decision will be announced around noon on the 19th, and a press conference by President Ueda Kazuo is expected to be held in the afternoon. The biggest focus isThe negative interest rate policy that has continued since 2016/2 will be liftedIt's about whether or not.
If the Bank of Japan implements interest rate hikes,Policy change for the first time in 17 years since 07/2It becomes. The spring battle, which Governor Ueda said “would be a big point,” was an average response in the 5% range for the first time in 33 years according to the 1st tally by the coalition on the 15th,Give a strong boost to interest rate hikesI'll do it. In addition, the Bank of JapanMonetary easing measures other than negative interest rates have also been lifted, and moving towards normalization of monetary policy is also viewed as dominantIt's been done. For the stock market,Will the Bank of Japan stop buying ETFsInterest is also drawn to
If the Bank of Japan implements interest rate hikes,Policy change for the first time in 17 years since 07/2It becomes. The spring battle, which Governor Ueda said “would be a big point,” was an average response in the 5% range for the first time in 33 years according to the 1st tally by the coalition on the 15th,Give a strong boost to interest rate hikesI'll do it. In addition, the Bank of JapanMonetary easing measures other than negative interest rates have also been lifted, and moving towards normalization of monetary policy is also viewed as dominantIt's been done. For the stock market,Will the Bank of Japan stop buying ETFsInterest is also drawn to
At the time of the decision meeting in January, there was also an intention to confirm the effects of the Noto Peninsula earthquake, and monetary mitigation measures were maintained. Meanwhile, the “main opinions” included quite a few positive opinions on policy changes, such as “requirements for policy revisions, including cancellation of negative interest rates, are being met” and “it is necessary to begin full-scale discussions about exits.”
At the time of the January decision meeting, there were many people in the market that negative interest rates would be lifted at the April decision meeting to announce the outlook (outlook report) for the new economic/price situation up to 2026 rather than during the March decision meeting.
However, Governor Ueda stated at the House of Representatives Budget Committee meeting on 2/22 that “we are in a state of inflation rather than deflation,” and positive comments on the achievement of the 2% price stability target were sent from multiple deliberation members thereafter,The March interest rate hike forecast gained momentum in the market. According to a questionnaire to 28 BOJ watchers conducted by Nikkei QUICK from March 4 to 6, the forecast period for negative interest rates to be lifted was 8 people (29%) in March and 17 people (61%) in April (Nihon Keizai Shimbun dated 12th). In contrast to this, in a survey of 50 economists conducted by Bloomberg from the 5th to the 11th, the March forecast was 38% and April was 54% (Bloomberg 12th).
alreadyJiji Press reported on the 14th that the Bank of Japan “has begun adjustments in the direction of canceling negative interest rates”。
Since Governor Ueda stated at the House of Councilors Budget Committee on the 13th that the trend of the Spring Battle “will be a major point,” the focus was narrowed down to wage increase responses from major companies. The weighted average wage increase rate for the 1st response tally (771 union) of the Spring Battle announced by the coalition on the 15th was 5.28%, 1.48 points higher than 3.80% of the previous year's 1st tally (of whichThe average of 358 small business unions with less than 300 employees is 4.42%). In comparison with the final tally in the past,5% range for the first time in 33 years since 5.66% in 1991It seems that it will strongly support the Bank of Japan's policy changes. According to reports so far, many major companies, such as Toyota Motor Corporation, have fully responded to requests for wage increases over 23 years, and there are also companies, such as Nippon Steel, that have responded in excess of union demands. The Nihon Keizai Shimbun dated 13th said”Another dimension wage increaseThe expression” was also used.
As the March interest rate hike theory gained momentum, in the marketIn addition to lifting negative interest rates, we will proceed with the normalization of monetary policyIt is also viewed as powerful. In addition to discussions on the cancellation of negative interest rates at the March decision meeting, the Nihon Keizai Shimbun dated 14thIt is expected that the abolition of long and short interest rate operations (yield curve control, YCC) and the purchase of risk assets such as ETFs (exchange-traded funds) and REITs (real estate investment trusts) will endIt was reported. Purchases of ETFs etc. began as part of the “comprehensive monetary easing policy” introduced in 2010,Currently, the Bank of Japan holds an ETF estimated at about 70 trillion yen, which is equivalent to about 7% of domestic stocksIt has been reported. If the policy changes, it seems that the exit strategy for the Bank of Japan's holdings will also be discussed.
In the stock market, interest rate hikes have already been factored in, and there is a view that stock prices will continue to rise even after interest rate hikes. The Nihon Keizai Shimbun dated 14th said”Movements incorporating the cancellation of the negative interest rate policy at decision meetings are intensifying” (Masuzawa Takehiko Equities Trading Head, Phillip Securities),”A market reaction that has already been factored in is expectedIntroducing analyses such as” (Ikeda Yunosuke, Chief Equity Strategist, Nomura Securities). Furthermore, in the same newspaper, Mr. Ikeda from Nomura's”There is a high possibility that clarifying the Bank of Japan's policy stance will support overseas investors' purchases of Japanese stocksBased on the comment”Even if negative interest rates are lifted, if the view that the Bank of Japan will not make continuous interest rate hikes for the time being intensifies, a sense of purchase security will be created in the stock marketIt is reported that there are many voices saying that.
Bloomberg on the 15th is also BlackRock Japan's Banba Yuu Alpha Operation Division Manager's”Since interest rate hikes will be moderate and an accommodative financial environment will be maintained, it is expected that stock prices will be supportedThe comment” has been introduced.
inverselyAs for interest rates, assume price declines (interest rates rise)The voices of investors who do it are heard. The interest rate on 10-year government bonds was 0.688% on 2/26, but it rose to the latter half of the 0.7% range on 3/15. Bloomberg on the 13th was Mark Dowding, Chief Investment Officer (CIO) of the asset management company RBC Blue Bay Asset Management”We have shorted our Japanese government bonds and have found a perfect opportunity in this tradeThe comment” was introduced.
Meanwhile, exchange rate movements are intensifying. The appreciation of the yen progressed from 3/6 to 11, advanced from the 150 yen range to the 146 yen range, then reversed, and returned to the middle of the 148 yen range on the 15th. In the background, there is widespread observation that interest rate cuts in the US will be delayed. Columbia Thread Needle Investment Interest Rate Strategist Ed Alhusseini said at Bloomberg on the 14th, “The Bank of Japan's lift-off (interest rate hike start) has already been factored in for a long time. This has not benefited the yen that much.After all, the fate of the yen is not in the hands of the Bank of Japan; it is in the hands of US risk” it is pointed out. In contrast to this, the Nihon Keizai Shimbun dated 13thWhile there are many views that the appreciation of the yen will gain momentum if the Bank of Japan decides to lift negative interest rates, there is also widespread alarm that the depreciation of the yen will progress significantly if the policy is left unchangedIt is being reported.
ー MooMoo News Mark
Source: Bank of Japan website, Union website, Bloomberg, Nihon Keizai Shimbun, Jiji Press, moomoo
Source: Bank of Japan website, Union website, Bloomberg, Nihon Keizai Shimbun, Jiji Press, moomoo
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
Read more
Comment
Sign in to post a comment
よよよよよよ : The economy is still bad
183527510 : Small to medium enterprises
on holidays
There is no increase in salary.
Even though my salary hasn't gone up
Prices are only rising rapidly.
Purring at home
There is no choice but to save money by doing it.
182351352 : As for current inflation, central banks in each country implemented monetary easing in a different dimension due to measures against the COVID-19 pandemic, large funds first flowed into futures and skyrocketed through HF, and in addition, stagnation in logistics was added, and prices rose. Inflation is not in line with the normal flow of the business cycle. Japan is poor in natural resources, so in order to acquire foreign currency, it is essential to revive the export industry based on the domestic return of production bases that create jobs lost due to the appreciation of the yen, so the depreciation of the yen will be a tailwind. If domestic employment is created and stabilized, the declining birthrate will naturally be resolved. The government's fiscal transfers and tax cuts are essential for cost bush inflation due to depreciation of the yen, but the budget disbursed by the United States, such as fiscal transfers exceeding 30 trillion yen to other countries and doubling defense costs, has increased like hot water, but policies to protect the disposable income of ordinary people have hardly begun. US bonds of 280 billion dollars owned by the government, which were due for redemption in August last year, have not even been paid interest, let alone redeemed. And they are being made to buy more. How many Japanese people are aware of this fact?
カレー党 : inflation? deflation?
Iki-chan, aren't you looking at the trees and not looking at the forest?
Neither the Diet nor the institutions that support it can control the Nippon Maru with just numbers
Less than 10% of people are said to be rich in the world, and the income of 10 million people in Japan is 10%. That kind of person is trying to influence the economy
80% of Japanese companies are small to medium enterprises. It also has little to do with the excited bear.
huh? I'm a person who has had almost no experience with Bear in a decent company for decades...
As mentioned in the comedy mentioned above, “I have no choice but to spend money by purring at home on my days off.”
This is the reality, isn't it?
Do people who are picked up in luxury Toyota cars have the power to see the forest?
The members of parliament are unreliable, so I would like to look forward to the opinions of experts, but it will be decided by next week's remarks.
Cancellation is necessary, but if we don't see the forest, Japan's loan bankrupts will have an impact on the world.
If you can't do it, the people you want to look forward to are disappointed
Stock prices have also been anticipated
But the Nippon Maru's mirai changes depending on how you do it
ひきゅう : It's just a matter of showing America, isn't it?
Aiyaya : A change this time is almost equal to no change![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")