Bank of Japan will wait until March before hiking rates

Bank of Japan Governor Ueda indicated this week that the Bank won’t make any policy changes at its upcoming meeting in January as it wants to see the results of next year’s spring wage negotiations. While the full results of the talks will only become available by July, the preliminary tally that should be available by the time of the Bank’s March meeting has usually been a reliable guide to the final outcome. The upshot is that we now expect the BoJ to hike its policy rate in March instead of our previous forecast of January.