The markets' attention today shifts to Japan, here's why

Asian stocks struggled to find momentum today, with gains in China taking a pause and after a series of solid wage-hike deals in Tokyo spurred bets on the Bank of China's imminent interest rate hike.
Japan.
As several analysts point out, just a few weeks after Japanese stocks surpassed three-decade highs, the country's financial markets are entering a little-known field: rising interest rates.
This theme excites investors all over the world: the exit of the Bank of Japan is expected by June, with the possibility that rates will fall to zero next week.
The implications could be global.
If a broader policy shift were to push long-term rates sharply higher, Japanese investors – who own about $2.2 trillion in foreign debt – could be more attracted to bonds closer to home, which would shock global bond markets.
Markets today: the focus is on Japan Japanese shares lost ground and the Nikkei closed the session with -040%.
The yen appreciated after Toyota Motor Corp.
and a number of other companies agreed to pay wage increases, fueling signs of a wage-price spiral.
Investors will be closely watching the outcome of this week's union wage deals to determine whether price pressure will be strong enough for the BOJ to raise interest rates as early as next week.
The Toyota report “strengthened speculation about a BOJ policy review, leading to a strengthening yen and an overall decline in stocks,” said Masahiro Yamaguchi, senior market analyst at SMBC Trust & Banking Ltd.
However, as Toyota has the biggest impact on all spring wage negotiations, “there is unlikely to be any further news that drags the market lower,” he added.
Tom Westbrook at Reuters pointed out that while higher-than-expected U.S.
inflation – and the risk of upside surprises elsewhere – is pushing back bets on rate cuts in much of the world, there is growing speculation that Japan will end the its experiment with negative interest rates next week.
Wages are in focus as the driver of a positive feedback loop that strengthens Japan's spending and confidence.
Pay rises at Toyota Motor were the largest in 25 years and the yen drew support from signs of a sustainable recovery in the Japanese economy.
Of note, despite “core inflation” – which excludes food and energy prices – having exceeded its 2% target for more than a year, the BOJ has barely moved from its current ultra-low monetary policy position.
accommodative in place in 2016.
While the central bank has indeed eased its yield curve control policy on long-term interest rates over the past 16 months, it has kept interest rates at -0.1% and an upper bound for the 10-year Japanese government bond yield at 1% as a benchmark.
Yield curve control is a policy tool in which the BOJ sets an interest rate, then buys and sells bonds as needed to reach that target.