Nomura: Expectations for a shorter rate-hike interval accounted for two-thirds of responses - FJElite

The timing of BOJ rate hikes: The consensus expects the BOJ to skip a rate hike at the July meeting. Around two-thirds of respondents expected the interval from the previous rate hike to be shorter than six months.

The BOJ’s terminal rate: Compared with the previous survey, fewer respondents expected the BOJ to raise rates to 2% or higher. Views that the BOJ will only be able to raise rates to below 2% accounted for around 60% of responses. The view that the BOJ will be unable to raise rates after the terms of Board members Tamura and Takata end may have become more widespread.

FX impact of additional BOJ rate hikes: A majority of respondents expected yen appreciation and dollar depreciation in response to a BOJ rate hike to be limited to around 0-1%.

The outlook for each asset class following GPIF-related reports: Expectations are rising for an expansion of the GPIF’s investment in domestic assets. At this stage, however, many respondents see the impact on markets as limited. If more credible additional information emerges, a “triple rally" reaction could occur.