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STIR: BOJ Dated OIS Firmer Across Meetings Since Last MPM

STIR
BulletMarketsFixed Income Bullets

BOJ-dated OIS pricing has firmed across meetings following the Bank of Japan's widely anticipated decision to hold rates steady at its October meeting. 

  • Since the decision, pricing has risen by 4–19bps, with September 2025 leading the gains.
  • For the upcoming December meeting, pricing has increased by 12bps, reflecting a 64% probability of a 25bp rate hike. This shift comes after recent remarks from BoJ Governor Ueda, who described the meeting as “live.”.
  • However, Ueda reiterated that the BoJ has no predetermined path for raising its policy rate from the current 0.25%, emphasising that rate decisions will be data-dependent and assessed on a meeting-by-meeting basis.
  • According to a Bloomberg survey, just over half of economists expect the BoJ's next rate hike to occur in December.
  • Market expectations currently indicate: a 64% probability of a 25bp hike in December; a cumulative 74% chance by January; and a full 25bp increase is not fully priced in until May 2025.

 

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BOJ-dated OIS pricing has firmed across meetings following the Bank of Japan's widely anticipated decision to hold rates steady at its October meeting. 

  • Since the decision, pricing has risen by 4–19bps, with September 2025 leading the gains.
  • For the upcoming December meeting, pricing has increased by 12bps, reflecting a 64% probability of a 25bp rate hike. This shift comes after recent remarks from BoJ Governor Ueda, who described the meeting as “live.”.
  • However, Ueda reiterated that the BoJ has no predetermined path for raising its policy rate from the current 0.25%, emphasising that rate decisions will be data-dependent and assessed on a meeting-by-meeting basis.
  • According to a Bloomberg survey, just over half of economists expect the BoJ's next rate hike to occur in December.
  • Market expectations currently indicate: a 64% probability of a 25bp hike in December; a cumulative 74% chance by January; and a full 25bp increase is not fully priced in until May 2025.

 

Keep reading...Show less