CITIC Securities: The short-term target rate of the Bank of Japan may reach about 0.5% by the end of the year

Sina Financial News CITIC Securities Research Report pointed out that the Bank of Japan significantly revised the monetary policy framework at the March monetary policy meeting, ended the negative interest rate and YCC policy, stopped buying ETFs and J-REITs, revoked the commitment to inflation overshoot, and will take short-term interest rates as the primary policy tool in the future. The Bank of Japan (BOJ) is fully aware of the inflation outlook, and the withdrawal of easing policy has not caused panic in the market. We believe that there is a possibility of further increases in the Bank of Japan’s policy rate after this meeting, and the short-term target rate may reach about 0.5% by the end of the year, and there is room for the US-Japan interest rate differential to narrow further, but the probability of a sharp reversal in the yen carry trade during the year may be small.