(Bloomberg) -- Market participants have overplayed recent comments by Bank of Japan Governor Kazuo Ueda and his deputy, as there is no reason to believe the central bank will scrap its negative interest rate early, according to a former executive director.

The yen surged and bond yields jumped Thursday after Ueda told lawmakers in parliament that his job would become more challenging from the year-end, a remark some took as a reference to a potential policy transition.

“This is probably a temporary market phenomenon,” Hideo Hayakawa, the former BOJ official, said in an interview Friday. “Ueda is looking for evidence. There is no need to rush now after intentionally choosing to be behind in coming this far.”

The central bank is likely to wait to end the negative rate until April, said Hayakawa, one of few economists who correctly predicted Ueda’s surprise move to adjust yield curve control in July.

Hayakawa was speaking against a backdrop of heightened volatility in financial markets. The yen extended gains and yields on benchmark bonds fluctuated Friday even after a sizable downward revision to third-quarter gross domestic product clouded the prospects for BOJ policy normalization.

Ueda’s remark Thursday came a day after his deputy Ryozo Himino appeared to be laying the groundwork for eventual normalization by noting that the bank’s first rate hike since 2007 might not be as harmful as some have feared. His comments prompted some market players to move forward their bets on when the BOJ might take that step.

Hayakawa, who has known Ueda for more than four decades, said he doesn’t know the thinking behind Ueda’s comment in parliament, but he believes the remark wasn’t intended to flag an early move.

“Of course, spring is absolutely in his mind as the timing but there is no need to prepare the market for it, as a majority of market players are thinking it will be in April,” Hayakawa said.

READ: BOJ’s Ueda Says Handling Policy Set to Get Tougher From Year-End

Half of the 52 economists surveyed by Bloomberg between Dec. 1-6 forecast the bank will scrap its negative rate in April. Some 15% forecast the transition occurring in January, and 2% expect it in March. 

Hayakawa’s remarks are likely to reinforce notions that the BOJ will wait to see the results of spring wage negotiations in March before deciding on a move. More than half of the economists said the upcoming negotiations will yield even bigger hikes than this year’s, which were the largest in three decades. 

Ueda’s often reiterated view that risks related to normalizing too early exceed those related to waiting longer mean the governor wants to confirm the likelihood of achieving the bank’s 2% inflation goal using data, which is different from the forward-looking approach of standard central bank practice, Hayakawa said. 

“It’s like a detective who is almost certain who the criminal is, but he can’t get a warrant for the arrest due to a lack of tangible evidence,” Hayakawa said. “They don’t move until they get a warrant. That’s what the BOJ is doing.”

That said, once the tightening cycle gets underway, the BOJ may move faster than many market players currently anticipate, Hayakawa said. After ditching the negative rate in April, the bank will probably raise rates by 25 basis points in each of the remaining quarters next year, he said. 

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