Wage negotiations are underway this week. It is already clear that major corporations are to make pay raises of at least 5%, with one of the largest hikes ever to take place at Toyota. The average increase across all companies is expected to be 4.2-4.3%. The government has previously urged companies to increase wages, which is expected to stimulate consumer activity and inflation.
At the same time, the Nikkei agency points out that, according to reports from people connected to the BoJ, the bank is expected to discuss an exit from negative interest rates next week. In addition to this, there was earlier speculation about abandoning the YCC (curve control) programme. In view of this, the USDJPY pair is capping gains, although today's rebound in the pair was puzzling with a fairly weak dollar. Information on the outcome of wage negotiations is expected to be available to the public this Friday.
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The USDJPY is capping gains and is near yesterday's close. Interestingly, US yields are rising, which is theoretically good for the dollar, but in the broad market the dollar is rather losing. Source: xStation5
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