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The Japanese Yen extended recent strength against the Dollar, Pound and Euro after the minutes from the most recent Bank of Japan meeting signalled an intention to raise interest rates.

The odds of an end to Negative Interest Rate (NIRP) policy rose after the minutes showed evidence of a firmer view amongst some BoJ policymakers that the key policy rate could be lifted.

"The yen strengthened in the early part of the Tokyo trading session today in response to the release of the Summary of Opinions from the monetary policy meeting earlier this month," says Derek Halpenny, Head of Research for Global Markets EMEA at MUFG.

The Yen started 2024 on a weak footing, but the selloff was staunched on January 23 when Bank of Japan Governor Kazuo Ueda told investors that an interest rate rise is possible at any meeting, even if it does not include the release of new forecasts.

Markets are heavily invested in the April policy meeting as being when the trigger is pulled and interest rates rise, largely because this is when the next set of forecasts are released.

But MUFG says March has been brought into scope for the timing of a rate hike, noting that policymakers were relatively sanguine about the negative economic impacts of the new year earthquake that hit Japan.

In addition, one policymaker stated that "it seems that conditions for policy revision, including the termination of the negative interest rate policy, are being met."

The policymaker cited improved wages and the prospect of the upcoming wage negotiation round being favourable, saying this economic setup presents a "golden opportunity" to alter the policy and escape decades of mild deflation.

Members also discussed the processes of exiting the current stance, including the sequencing and the potential termination of ETF buying.

MUFG maintains a belief that the Bank of Japan will exit NIRP in April, saying the latest communications are a further example of evidence that a shift in policy is coming.

"But Ueda communications and wage data will remain key given there is plenty of developments to unfold before we get to the March and April BoJ meetings," says Halpenny.