The Bank of Japan is set to normalise monetary policy when certain conditions are met, namely inflation, positive real cash earnings, and a recovery in domestic demand growth. We expect the window for normalisation to open from July for about a year before inflation begins to fall below 2%. Back in March, the Bank of Japan made a big decision to raise rates for the first time in 17 years in the hope that higher wage growth would lead to a recovery in consumption and, therefore, keep inflation at the central bank’s target in a sustainable way. The BoJ justified its decision by reiterating that monetary conditions will ... (full story)