Strategist Urges Bank of Japan to Swiftly Embrace a New Normal, Citing Harmful Current Policy

A strategist argues that the Bank of Japan (BOJ) needs to transition to a "new normal" as its current ultra low interest rate policy has been "very harmful" for the economy. The strategist suggests that moving to a more normal structure and allowing bond and equity markets to function would benefit financial markets. The BOJ recently kept interest rates unchanged but loosened its yield curve control, signaling a potential shift away from negative interest rates. Moving away from negative rates would have wide-ranging effects on the Japanese economy. The strategist also believes that the yen is undervalued and expects longer-term Japanese government bond yields to rise significantly.