Nomura revises its expectations regarding the Bank of Japan's (BOJ) timeline to move away from Yield Curve Control (YCC) and Negative Interest Rate Policy (NIRP).

Key Points:

1. Postponement of Exiting YCC:

   • Nomura now predicts that the BOJ will depart from its YCC stance in Q4 2024, a delay of six months from their earlier forecast. The decision will be based on observing wage growth patterns during the "shunto" (spring wage negotiation season) and gauging the post-shunto economic recovery.

2. Further Delay in Abandoning NIRP:

   • The timeline for the BOJ to discontinue its NIRP is anticipated to be pushed even further. Nomura believes this could be postponed to 2025 or potentially later.

Summary:

Nomura has adjusted its projections for the BOJ's policy trajectory, now expecting a delay in the exit from both YCC and NIRP. While the departure from YCC is now anticipated in Q4 2024, following the assessment of wage trends during and after the shunto, the abandonment of the negative interest rate policy might not materialize until 2025 or even later.