Recent reports reflect the growing confidence of the Bank of Japan in the economic trend to support a shift in policy. It is widely expected in the market that the Bank of Japan will adjust its monetary policy at the upcoming meeting. Greg Hirt, Chief Investment Officer of Allianz Investment Global Multi-Asset, pointed out that the Bank of Japan is likely to make preliminary adjustments to its policy framework in March or shortly after in April, aiming to exit unconventional monetary policy. Some of Japan's unconventional monetary policies may be canceled, but expectations should not be too high. Japan's economic situation has shown some fragility recently, with revised economic growth data barely avoiding a technical recession and real incomes for Japanese households continuing to decline, leading to sustained weak domestic consumption. In this context, any policy adjustments will be gradual. In addition, it is believed that the Bank of Japan has learned from past lessons of economic slowdown caused by premature and frequent interventions in monetary policy. Potential revisions to unconventional policies may include yield curve control, negative interest rate policy, tiered interest rate system, ETF purchase plan, and bond purchase plan. The Bank of Japan is likely to withdraw yield curve control and the negative interest rate policy simultaneously, while continuing to purchase bonds to maintain a smooth transition and limit sudden changes in long-term interest rates. The Bank of Japan has emphasized previously that its goal is a gradual transition rather than a sudden halt to policies. Therefore, it is expected that the central bank will not directly initiate a tightening cycle at this time, and any further rate hikes will be highly data-dependent and uncertain. In terms of timing, Greg Hirt believes that there is a high probability of preliminary adjustments in March, but there is also significant uncertainty. The Bank of Japan currently has a good opportunity because the market has largely absorbed the possibility of preliminary policy adjustments, limiting the actual impact on the market. The Bank of Japan may want to move towards normalization of monetary policy before further deflation or complications arise from global central banks adjusting their policies. Even if the Bank of Japan does not take action in March, it is likely to provide guidance on its future policy trajectory to prevent market fluctuations before the April meeting. Therefore, the market's reaction is expected to be very similar to actual policy changes. The biggest risk of taking action in March is that the Bank of Japan may want to see more data on wage agreements for small and medium-sized enterprises, which will require more time to be released. Allianz Investment maintains its position unchanged, as actions by the Bank of Japan and the Federal Reserve will become more apparent in the coming months. As long as the overall direction remains the same, the impact of policy adjustments being early or postponed by a month is not significant. Therefore, Allianz Investment remains cautious on Japanese government bonds and moderately optimistic about the Japanese yen. Although the Japanese stock market may be affected in the short term due to a stronger yen and recent capital flows, moderate tightening policies by the Bank of Japan, along with attractive corporate valuations and profit trends, should continue to benefit the Japanese stock market in the medium term.