Deutsche Bank: The Bank of Japan must release further tightening signals to appease the market.

Deutsche Bank strategists Mallika Sachdeva and Tim Baker wrote that expectations of a rate hike by the Bank of Japan are not yet enough to support the yen exchange rate and stabilize the bond market; traders will be watching for signals from decision makers that could push terminal rate pricing closer to 2%. "What kind of signal does the Bank of Japan need to release in order to stabilize the Japanese bond market and support the yen?" they wrote in a report on Thursday. "We believe that the market may need to digest the Bank of Japan's 2% terminal rate level, and tomorrow will be looking for signals that will push pricing in that direction."