The Bank of Japan will avoid raising interest rates again anytime soon, with further tightening likely dependent on the fate of the U.S. economy, according to the head of global rates at JPMorgan Asset Management.

¡°There¡¯s a path for the Bank of Japan to move again actually, but that¡¯s the path where the Federal Reserve cuts and they do manage to stabilize the U.S. economy,¡± said Seamus Mac Gorain at the firm, which oversees $3.3 trillion in assets. ¡°If we¡¯re in recession, of course, they¡¯re done now.¡±

JPMorgan Asset has wagers that profit when the yield gap between shorter and longer-term Japanese bonds narrows, and is among those mapping out the BOJ¡¯s next policy step after a wild week of trading.

Conflicting views around Japan¡¯s policy path have worsened market convulsions, with the battered carry trade ricocheting across everything from credit to stocks and Treasuries.

Around 65% out of 34 economists see Japan¡¯s policy rate rising again before the end of the year. Traders are less confident: swaps markets are pricing in about a 30% chance of a quarter-point hike by December, down from around 60% a week earlier.

Mac Gorain reckons any further tightening is likely only in 2025. ¡°They could do a series of hikes but it will depend on a pretty benign¡± global backdrop, he said in an interview.

The views come after the yen skyrocketed to as strong as |141.70 per dollar on Monday while traders grappled with hawkish BOJ commentary. Less than 48 hours later, Japan¡¯s currency tanked to ?147.90 after Deputy Gov. Shinichi Uchida said Japan won¡¯t hike if markets were unstable. During the same period, government bonds swooned before recovering. The yen advanced 0.5% to ?146.57 per dollar on Friday.

¡°It¡¯s pretty clear that the Bank of Japan is not going to move until markets settle down,¡± London-based Mac Gorain said. ¡°It will certainly be dependent on the U.S. and the global economy avoiding recession.¡±