Various media outlets, including Bloomberg and Nikkei Asian Review, are reporting about a massive shift in the market’s pricing of the Bank of Japan’s (BoJ) monetary policy outlook, following the hawkish comments from  BoJ Governor Kazuo Ueda delivered over the weekend.

“As of Tuesday, overnight-indexed swaps indicated the central bank would exit negative rates in January, based on data compiled by Bloomberg. After the July policy meeting market pricing suggested an exit in September 2024,” per Bloomberg.

Meanwhile, the Nikkei reported, “a January decision to end negative interest rates appears to be a more realistic scenario, with practical factors delaying implementation to February. The BoJ is set to update its economic and price outlook for fiscal 2023 to fiscal 2025 at that time, giving it material to help explain the basis for the policy change.”

“Waiting until April would let the central bank see the actual results of spring wage negotiations,” the Nikkei reported.

Market reaction

On the above market chatter, USD/JPY is off the weekly high of 147.44, trading at 147.34, at the time of writing. The pair is 0.19% higher on the day.