(Bloomberg) -- More than a half of surveyed Bank of Japan watchers forecast the central bank will decide to trim its government bond buying when authorities meet next week, with a growing number also looking ahead to a rate hike in July. 

Some 54% of 50 economists said the bank will slow the pace of bond buying from around ¥6 trillion per month at the Policy Board gathering ending on June 14, according to a Bloomberg survey. About 70% see the possibility of such action rising due to recent weakness of the yen. 

As for the timing of the bank’s next interest rate hike, the poll showed many analysts are moving their expected time frames forward. One-third said they now expect the move in July, compared with 19% who held that view when surveyed in April. The percentage anticipating officials will wait until October dropped to one-third from 41%. Only one economist predicts a rate increase next week.

Click here to read the full survey results.

Governor Kazuo Ueda and his board will be gathering to discuss monetary policy for the first time since the yen’s dip to a 34-year low prompted the Ministry of Finance to conduct the most aggressive yen-buying intervention ever through two apparent salvos in late April and early May. Around three quarters of respondents to the survey said the BOJ faces rising pressure to respond to the weak yen after the government actions. 

The economy has contracted or stalled for three straight quarters, and various maturities of government bonds have recorded the highest yields in a decade, so many BOJ watchers say it’s likely officials will prioritze cutting bond purchases before pushing the short-term benchmark rate higher.

“The reduction of bond purchases is the best way to put the brakes on the weak yen at this point considering the need to adjust quantitative easing sooner or later,” Shinichiro Kobayashi, chief economist at Mitsubishi UFJ Research & Consulting, wrote in his survey response. “Given rising speculation for such a move, there’s a risk of a plunge in the yen without it.”

When the BOJ ended its negative rate with its first hike in 17 years in March, it pledged to keep the pace of monthly bond buying at around ¥6 trillion per month. Ueda said at the time that he wanted to see how the broader policy pivot would be digested in the market before reducing purchases. 

BOJ officials will probably consider whether it’s the right time to slow the pace of bond buying and if they need to provide more details on the outlook to improve predictability at this meeting, people familiar with the matter told Bloomberg earlier this month. 

“It’s desirable to make the guidance of bond purchases a non-event or separate from monetary policy just as the FRB and ECB have done,”said Naomi Muguruma, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities Co. “What’s happening now is the opposite.”

There is an increasing focus on the BOJ’s regular bond operations, particularly after it rattled the market on May 13 by reducing its buying. The bank faced a shortage of sellers in its operation on May 23 for the first time since 2013.

With the BOJ having shuttered its yield curve control mechanism and ended its pledge to expand the monetary base, it’s become harder for market participants to forecast the bond market’s trajectory. The BOJ’s bond purchases have therefore become “noise” in the market, amplifying the urgency for authorities to enhance the predictability of its bond buying path, Muguruma said. 

Some 65% of survey respondents agreed with that view, saying the bank should present a road map of sorts showing how it plans to adjust its government debt purchases.  

For now there appears to be little market consensus on the specifics regarding how the BOJ will approach quantitative tightening next week. Several economists see a reduction by ¥1 trillion, while others see a smaller cut at the start. Some hold the view that the BOJ will merely unveil a plan for cutting bond buying in coming months.

The yen traded around 156 per dollar late Thursday in Tokyo. In late April, Japan’s currency slid to 160.17, its weakest level since 1990, not long after Ueda made remarks conveying little concern about the currency at a post-decision press conference on April 26. He later changed his tone to signal heightened alarm.

“There is little room for the BOJ to send a dovish message this time after Ueda’s remarks at the April news conference were the catalyst for an acceleration of the yen’s depreciation,” said Tsuyoshi Ueno, senior economist at NLI Research Institute. “I’m watching for any signs indicating an early rate hike might become reality.”

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