TOKYO- The Bank of Japan will end its negative interest rate policy next year, according to nearly two-thirds of economists in a Reuters poll, with more now saying the central bank is inching closer to phasing out ultra-accommodative monetary policy.
BOJ Governor Kazuo Ueda is seeking to dial back the complex monetary stimulus deployed by his predecessor, but faces a challenging task of doing so without causing sharp and disruptive swings in capital markets.
While 25 of 28 economists polled Oct 17-25 expect no change to policy at next week’s meeting, the remaining three, at Barclays, JP Morgan and UBS, said the BOJ would begin unwinding its easy stance then.
A further 17 of 27, or 63 percent , expected the BOJ to end its negative rate policy, which has set Japan’s short-term deposit rate at minus 0.1 percent , by the end of next year. That was up from 52 percent in a September poll and just 41 percent in August.
The remaining 10 economists selected “2025 or later.”
Of the 17 economists who chose 2024, 10 identified the April 25-26 meeting for the end of negative rates, the poll found. Three opted for January, while two went for July, one selected March and another picked June.
Japan stands out as the sole major central bank that has forged ahead with easy policy during a time when most others have aggressively raised interest rates to tamp down inflation, with some policymakers still not ready to call time on tightening.
UBS economist Masamichi Adachi said the BOJ will end negative interest rates at its April meeting after observing the results of next year’s spring wage negotiations. He says its goal of stably achieving the 2 percent inflation target will be met in fiscal year 2026.