Former Fed vice chair Clarida says the BOJ policy rate could be hiked to 0% by early 2024

<p>Clarida is now a Pacific Investment Management Co (PIMCO) managing director and the firm's global economic advisor. He posted his thoughts on the Bank of Japan.
</p><p>In brief:
</p><p>After seeing years of disinflation or outright deflation, Japan’s policymakers are comfortable with the above-target inflation seen since early 2022.</p><p>

Under the new leadership of Governor Kazuo Ueda, we’ve already seen several changes at the BOJ, including a material adjustment in July to its yield curve control (YCC) strategy. </p><p> If data indicate inflation can sustain more than the BOJ currently forecasts, which we expect, then the BOJ could abolish YCC late this year or early next.
</p><p>
At some point, as the economy reflates, we expect the BOJ will move away from the zero or below-zero short-term rates that have prevailed for over a decade. The policy rate could be hiked to 0% by early 2024.</p><p>
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</p><p>The Bank of Japan introduced YCC in 2016. YCC refers to the central bank purchasing Japanese government bonds to peg the 10-year yield at 0% and stimulate growth.</p><p>Bank of Japan Governor Ueda </p>

This article was written by Eamonn Sheridan at www.forexlive.com.