By Satoshi Sugiyama
TOKYO (Reuters) - Any prospects the Bank of Japan (BOJ) will end its negative interest rate policy this month have been extinguished, economists said unanimously in a Reuters poll, citing the central bank chief's recent dovish comments.
That reflects the growing market view that a departure from the country's ultra-loose monetary settings, a global outlier, requires patience as the BOJ assesses the impact from a Jan. 1 earthquake on the Noto peninsula and trends on wage hikes among Japanese companies.
None of the 29 economists in the Jan. 9-16 poll said the BOJ would ditch the policy setting Japan's short-term deposit rate at minus 0.1% at a meeting next week. That was down from 14%, or four of 28 economists, who expected a change in a December survey.
Only one economist, at JPMorgan, saw a possibility the BOJ might begin unwinding the accommodative monetary regime in January by tweaking its forward guidance.
BOJ Governor Kazuo Ueda told public broadcaster NHK last month he was not rushing to break away from the ultra-loose monetary policy, pointing out the risk of inflation accelerating and running well above 2% was small.
In total, 82% of economists predicted in their end-quarter forecasts the negative rate policy would be over by end-2024, slightly down from 84% in the previous poll.
April remained as a top choice among economists for the negative rate policy to be abandoned, according to 69%, or 20 of 29, responding to an extra question.
Three chose July and another three selected 2025 or later, while two opted for March and one went with October.
About 62% of economists said the 7.6 magnitude earthquake that struck the Noto peninsula would not affect the timing of the policy change, but 14%, or four of 29 respondents, said it would.
"The hurdle for lifting negative interest rates in January is seen to have been raised," said Satoshi Takase, an analyst at Mizuho Securities.
HIGH HOPES FOR WAGE HIKES
Meanwhile, economists in the poll anticipated a brighter outlook on the wage hike front, a crucial point for the BOJ in deciding policy.
In this month's survey, 90% of respondents predicted wage growth and base salary increases on average for the next fiscal year starting in April would exceed this fiscal year's 3.58% at big Japanese firms, up from 74% when last asked in November.
The percentage also jumped for Japanese businesses in general, including small and mid-sized firms, with 77% of economists expecting a bigger increase, up from 65% in November.
"The momentum for consecutive wage increases is growing, although mainly among large enterprises, as corporate earnings are firm primarily at large manufacturers and wage increases are necessary to win the competition for talented personnel," said Mari Iwashita, chief market economist at Daiwa Securities.
Momentum for wage hikes was building earlier this year than in 2023 but the outlook appeared uncertain, the BOJ said last week.
Big companies agreed to their largest pay rises in a quarter of a century at last year's annual labour talks to cope with a tightening job market and to compensate employees for rising living costs.
(For other stories from the Reuters global long-term economic outlook polls package:)