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Market expectations ebb for additional BOJ easing

Rate controls and rising US interest keeping yen weak

TOKYO -- Interest swaps suggest that investors no longer expect the Bank of Japan to further ease monetary policy anytime soon, thanks in large part to effective yield curve controls and expectations of U.S. fiscal stimulus under a President Donald Trump.

"This month's meeting will be held under the calmest conditions seen this year," said a BOJ official, referring to a meeting slated for next week. The bank has had a busy 2016, starting with its negative-rate announcement in January, followed by July's additional quantitative loosening, September's pivot to rate controls, and November's pushing back of the 2% inflation target for the fifth time under the easing program. But now, the financial waters are finally stabilizing.

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