BOJ forecast from Goldman

Goldman Sachs expects the BOJ to raise interest rates for the first time since 2007. Goldman Sachs expects the Bank of Japan to raise interest rates for the first time in 17 years at its March meeting this week. The bank’s senior Japan economist, Tomohiro Ota, cited reports of stronger-than-expected wage increases in annual wage talks and then a move away from negative interest rates at the BOJ’s March meeting that ends on Tuesday. “The BOJ has not yet sent any signals denying the news. These developments suggest that the BOJ likely does not need more data to change policy or will not wait to justify a policy change with its quarterly Economic Outlook report in April,” Ota said in a note on Monday. While a small majority of economists still expect the central bank to raise interest rates in April, a growing number have shifted their forecasts to March in the past two weeks, buoyed by signs that wage talks this year will be much stronger than expected. Ota said he expected the BOJ to lift its yield curve control policy, which the central bank uses to target long-term interest rates by buying and selling bonds as needed. He still expected the central bank to “not make a clear commitment” on the size of its Japanese government bond purchases or halt ETF purchases.