Muto says that as things stand, there is a high chance for yield curve control (YCC) and negative rates to be scrapped – possibly as early as April next year. The key thing that such a development hinges on will be the outcome of the spring wage negotiations. Meanwhile, he also says that the BOJ has no choice but to hold on to ETFs for now as any unwinding in their holdings could trigger a market selloff.
He’s just reaffirming the market landscape and outlook at the moment. As mentioned many times already, the BOJ has kicked the can down the road to next March and April as they hope to make a change after the spring wage negotiations then. The question in the next few months will be whether the inflation outlook will have materially changed by then to justify such a move.