VIEW: Barclays: YCC Tweak To Make Markets Cautious Re: Change In ‘23

Barclays believe the YCC surprise will “lead to a cautious stance in the markets against a further policy change, especially in 2023. Given wage and price trends and the external environment, including monetary policy by other central banks, we do not believe conditions will allow for continuous YCC changes. For its next policy move in the medium to long term, we believe the BoJ will opt not to widen its yield target range further but to adopt a shorter YCC target yield, as we have long projected. We should note, however, the gradual change in the dynamics surrounding BoJ monetary policy, including recent speculation of a revision in the joint statement with the government.”