Ella 
After Bank of Japan Governor Kazuo Ueda made hawkish remarks last weekend, multiple media outlets, including Bloomberg and Nikkei Asian Review, reported that the market’s pricing of the outlook for the Bank of Japan’s monetary policy has changed dramatically.
As of Tuesday, overnight index swaps indicated the Bank of Japan would exit its negative interest rate policy in January. Bloomberg said that after the July policy meeting, market pricing showed that the Bank of Japan would exit its negative interest rate policy in September 2024.
A January decision to end negative interest rate policy appears to be the more realistic scenario, with practical factors likely to delay implementation until February. The Bank of Japan will then update its economic and price outlook for fiscal 2023 to fiscal 2025 to provide a basis for proposing policy adjustments.
Wait until April for the Bank of Japan to observe the actual outcome of spring wage talks.
Market Reaction
Following the above-mentioned market news, USD/JPY fell from a one-week high of 147.44, and was trading at 147.34 at press time. USD/JPY is up 0.19% on the day.
