The Bank of Japan remains cautious about its policy changes despite more than a year of above-target inflation and a rebound in growth. There are growing signs of an end to disinflation and above-potential growth in 2023 and 2024, but the BoJ is still not confident enough and seems to be concerned that premature policy changes could mean a return to disinflation. For this reason, we expect the BoJ not to raise its policy rate until the first quarter of next year but tweaking its YCC policy is a possible option, as it aims to improve market functionality and reduce the burden of asset purchasing. Compared to other ... (full story)