UBS expects the Bank of Japan to ease monetary policy further, either this month or next.

Analyst at the Swiss bank have predicted a 65% likelihood of additional measures when officials meet tomorrow or at the next vote in April.

“Driving this would be recent JPY strength, declining corporate sentiment, and downward pressure on prices and inflation expectations” said Daiju Aoki, economist at UBS.

“We also think that Japanese authorities will likely want to be seen to be active in averting a global recession ahead of hosting the G7 on 26-27 May, particularly if other countries are providing monetary and/or fiscal support for their economies.”

Economists polled by the Japan Centre for Economic Research found that 12 expect no further easing in 2016, 13 expect easing from June onwards and only 9 expect an easing by the April meeting. 

At UBS, the house view is that there will be an increase of purchases in the BoJ’s quantitative and qualitative easing programme (QQE) by ¥20trn a year to ¥100trn ($880bn).

Japan surprised markets in January with the introduction of a negative interest rate. The move was designed to spur inflation, investment and spending.

The eurozone has negative interest rates, but Japan's decision was a first for the world’s third-largest economy.

The BoJ's governor Haruhiko Kuroda said at the time that the weakening growth rate of the global economy was the main factor behind the move.