The Bank of Japan (BoJ) has stepped up its hawkish comments in a series of communications that insiders say is priming markets for an end to negative interest rates, which could happen in the first few months of next year.
The distinct change in BOJ commentary is a part of Governor Kazuo Ueda’s plan to dismantle the controversial monetary stimulus of his dovish predecessor Haruhiko Kuroda, which has been blamed for a host of issues including the yen’s sharp declines.
This follows the BOJ’s decision last month to relax its cap on long-term rates by tweaking its yield curve control (YCC) policy and contrasts with the rhetoric of Ueda shortly after he took the helm this year, which seemed to call for a continuation of Kuroda-era stimulus.