Rates Strategy Weekly

The report previews the June BOJ Monetary Policy Meeting, where a rate hike to 1% and a halt to JGB purchase tapering are expected. While the market has largely priced in these moves, the tone of communication is anticipated to be hawkish due to rising inflation concerns.

Key Takeaways

• 1.The Bank of Japan is expected to raise the policy rate to 1% and stop tapering JGB purchases at the June 15-16 Monetary Policy Meeting.
• 2.The market reaction to the anticipated rate hike is expected to be limited as it has been largely priced in.
• 3.Deputy Governor Uchida's communication at the press conference is viewed as potentially hawkish in tone, focusing on upside risks to prices.

Table of Contents

• Preview of June MPM: "Hawkish rate hike" expected
• Decision and official statement
• Governor’s press conference (to be handled by Deputy Governor Uchida)
• Market reaction
• DEVELOPMENTS THIS WEEK AND IMPLICATIONS FOR RATES OUTLOOK
• SHORT-TERM OUTLOOK (ONE WEEK – ONE MONTH)
• MEDIUM-TERM OUTLOOK (SEVERAL MONTHS – ONE YEAR)
• Risk scenarios
• Envisaged timetable for BOJ JGB-buying operations
• Yen rates relative value and investment strategies
• RELATIVE VALUE SCORE TABLES

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