BOJ to call time on negative interest rates and end yield curve control - Nikkei

The Bank of Japan is set to decide on ending its negative interest rate policy and also call time on its yield curve control and purchase of risk assets at its board meeting through Tuesday, Nikkei newspaper reported on Monday. The country's central bank, which is holding a two-day policy meeting is preparing to draw the line on much of its "massive" monetary easing program, the report said.

The Bank of Japan is set to decide on ending its negative interest rate policy and also call time on its yield curve control and purchase of risk assets at its board meeting through Tuesday, Nikkei newspaper reported on Monday.

The country's central bank, which is holding a two-day policy meeting is preparing to draw the line on much of its "massive" monetary easing program, the report said. "With the BOJ's goal of sustainable 2% inflation in sight, the bank is moving to guide interest rates higher for the first time in 17 years," Nikkei said.

BOJ officials, including Governor Kazuo Ueda, have recently stressed the timing of a shift away from negative rates would depend on the outcome of this year's annual wage negotiations between workers and employers. The country's largest firms have agreed to raise wages by 5.28% for 2024, the heftiest pay hikes in 33 years, the country's largest union group said on Friday.

Higher pay hikes will likely increase the chances of exiting negative rates, as the offers by big corporates generally set the tone for those by smaller firms, Reuters reported earlier in the month. The BOJ is also planning to wind down on yield curve control, a policy it had introduced in Sept. 2016 under which the central bank would buy huge quantities of the country's government bonds to keep short-term yields near its target of minus 0.1% and long-term yields around zero, the report added.

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