Market news
05.01.2023, 07:33

No further BoJ yield curve control (YCC) revisions in 2023 – Societe Generale

Analysts at Societe Generale assign a 60% probability for no further yield curve control (YCC) revisions by the Bank of Japan (BoJ) in 2023

Key Quotes:

“We think Japan will struggle to put through its base salary rise ex. regular/annual increase in excess of 2% in the traditional spring round of wage negotiations. In addition, with the Fed and ECB likely to stop hiking rates, and in view of the BoJ’s new measures, we think the deterioration in bond market functioning may stop this year. Moreover, the BoJ's likely rapid exit from monetary easing would have significant disadvantages from the perspective of fiscal stability.”

“We also explore two sub scenarios: ‘YCC attack’ (30% probability) and ‘overcoming deflation’ (10% probability). The former assumes that the range of fluctuation permitted for the 10-year JGB yield is widened from ±50bp to ±75bp. In gauging this scenario, we focus on the shape of the JGB yield curve and the BoJ’s Bond Market Survey. In our second scenario, we assume that the BoJ raises its short-term and long-term interest rate targets to 0% and 0.25% respectively and maintains its long-term interest rate range at ±50bp. To gauge this scenario, we focus on the spring round of wage negotiations, the Domar condition and the GDP deflator.”

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location