Morgan Stanley MUFG: BOJ Unlikely To Signal Excessive Hawkishness Next Week

Morgan Stanley MUFG Securities said it was unlikely Bank of Japan Governor Kazuo Ueda would deliver an overly hawkish message at next week’s press conference beyond what markets have already priced in. According to Jin10, the firm’s four economists and strategists said overnight index swap markets have largely priced in expectations that the BOJ will raise rates to 1.25% by the end of the year. The report also noted that uncertainty in the Middle East has increased recently and that equities have shown some signs of instability. It added that the BOJ may raise its policy rate by 25 basis points to 1.00% at its June meeting.