Kyodo News reported on the 15th that the Bank of Japan is expected to decide on lifting its negative interest rate policy at its monetary policy meeting to be held on the 18th and 19th.
According to this report, the Bank of Japan believes that there is a high probability that a virtuous cycle in which wages and prices will rise together will materialize. The first round of spring labor responses released by the Rengo on the 15th showed that the average wage increase rate was 5.28%, the highest level in 33 years.
The Bank of Japan has a policy of maintaining an accommodative financial environment even after the end of negative interest rates, and is said to be assuming a transition to a de facto zero interest rate policy.
In order to avoid a sharp rise in long-term interest rates, Kyodo reported that it will continue purchasing government bonds even after the cancellation, but will suspend new purchases of exchange-traded funds (ETFs), which had been continued for the purpose of stabilizing the market.
Additionally, according to the Nihon Keizai Shimbun, the most likely plan is to raise the short-term policy interest rate, currently at minus 0.1%, by more than 0.1 percentage point and guide short-term interest rates to 0-0.1%. In addition to ending the negative interest rate policy, the government plans to abolish long-term and short-term interest rate control (yield curve control, YCC), which has been a pillar of large-scale easing.
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(Updates with information in fifth paragraph)