TOKYO: The Bank of Japan (BoJ) is expected to end its negative interest rate policy tomorrow on substantial wage hikes by big firms in this year’s wage negotiations, according to the Nikkei newspaper on Saturday.
The BoJ began coordinating both within and outside the bank last Friday on ending its negative interest rate policy, the economic daily said.
Japan’s biggest companies agreed to raise wages by 5.28% for 2024, the heftiest pay hikes in 33 years, the country’s largest union group said last Friday.
This year’s wage hikes “are of a level that even reflationists who are cautious about modifying monetary policy would accept a change in policy,” the Nikkei cited one BoJ source as saying.
BoJ officials, including governor Kazuo Ueda, had recently stressed the timing of a shift away from negative rates would depend on the outcome of this year’s annual wage negotiations between workers and employers.
Sources have told Reuters the BoJ would debate ending its negative rates next week if last Friday’s preliminary survey on big firms’ wage talks outcome yield strong results.
Bigger-than-expected pay hikes have significantly heightened the chance the BoJ will end eight years of negative interest rate policy, marking a landmark shift away from its huge stimulus programme. — Reuters
