Market Expectations of Monetary Policy in QUICK Bond Market Survey

This weekly report analyzes current JGB market sentiment via the QUICK survey, highlighting a gap in terminal rate expectations and the influence of the Iran conflict on BOJ policy.

Key Takeaways

• 1.A significant divergence exists between domestic market expectations (QUICK survey) and the OIS market regarding the terminal rate and the neutral rate of interest.
• 2.Market participants identify the stabilization of the Iran situation as the primary necessary condition (63% of respondents) for the next BOJ rate hike.
• 3.The Bank of Japan's JGB holdings decreased in April to JPY528.90 trillion as quantitative tightening (QT) continues.

Table of Contents

• (1) Market expectations of monetary policy as expressed in QUICK bond market survey
• DEVELOPMENTS THIS WEEK AND IMPLICATIONS FOR RATES OUTLOOK
• SHORT-TERM OUTLOOK (ONE WEEK – ONE MONTH)
• MEDIUM-TERM OUTLOOK (SEVERAL MONTHS – ONE YEAR)
• Risk scenarios
• (2) Envisaged timetable for BOJ JGB-buying operations
• BOJ bond purchases in April (outstanding JGB holdings)
• (3) Yen rates relative value and investment strategies
• RELATIVE VALUE SCORE TABLES

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