Earthquake unlikely to alter the Bank of Japan's plans

<p>Nikkei is out with a good report summarizing the state of play for the Bank of Japan in the coming months. It notes that the odds of the BOJ exiting negative rates in January has fallen since the earthquake but it still remains a likelihood in March or beyond.</p><p>Summary:</p><ul><li><p>Continued high anticipation for the Bank of Japan to end negative interest rates in the first half of the year, conditional on strong wage and inflation data.</p></li><li><p>March and April wage negotiations are key for BOJ's economic outlook. Daiwa estimates pay increases
in the high 3% range would put inflation at the BOJ's 2% target and they see 3.8% hikes.</p></li><li><p>Ueda has repeatedly noted that the BOJ's exit from easing relies on achieving stable 2% inflation and wage growth</p></li><li><p>A delayed rate cut by the Fed would allow the BOJ more time to assess Japan's economy.</p></li><li><p>Markets still believe the policy rate unlikely to exceed 0.10% by year-end.</p></li></ul><p>This report is more speculation than any kind of leak but it's a good summary. <a href="https://asia.nikkei.com/Economy/Bank-of-Japan/BOJ-easing-exit-in-first-half-still-on-table-despite-earthquake" target="_blank" rel="nofollow">Read it here</a>.</p>

This article was written by Adam Button at www.forexlive.com.