Former BOJ Official: 50% Chance of Rate Hike in April

Odaily Planet Daily reports: Eiji Maeda, a former official at the Bank of Japan responsible for monetary policy, stated that despite new uncertainties arising from the Iran conflict, the probability of the Bank of Japan raising interest rates next month remains around 50% after holding rates steady in March. He said, “The next rate hike is likely to occur in April or June. Given current uncertainties, both scenarios are roughly equally probable. This is an extremely difficult situation for the Bank of Japan.” He noted that raising rates in April would be more prudent due to the rising risk of falling behind on inflation. His view aligns with general market expectations, as overnight swap markets indicate traders see a roughly 60% chance of a rate hike in April. Maeda added, “If the Bank of Japan does not act in April, the yen could weaken further. If the yen breaks past 160 against the dollar, it would increase the risk of falling behind market trends.” Even at current levels, the yen is “already quite weak,” and a modest rebound would be more comfortable for Japanese businesses and households. (Jinshi)