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Immediate market impact of policy changes should be muted.
By Dong CHEN, Chief Asia Strategist and Head of Asia Research at Pictet Wealth Management
On 19 March, the Bank of Japan abandoned its negative interest-rate policy, announcing a rise in its benchmark overnight rate from between -0.1% and zero to between zero and +0.1%, the first time it has raised rates since 2007. The Bank also lifted its yield-curve controls—a policy put in place in 2016 to cap yields on 10-year Japanese government bonds (JGBs)—and said it will discontinue purchases of Japanese exchange traded funds and real estate investment trusts.
Having been well signalled, we believe these decisions should have relatively mild market...
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