The Bank of Japan signals subtly, avoiding commitments to raise interest rates before the April meeting

ME News report, April 6 (UTC+8). In its two quarterly regional economic reports, the Bank of Japan avoided fueling market expectations for a rate hike this month by sending highly delicate signals. In another press release summarizing the views of regional branch managers, the Bank of Japan stated that, looking ahead, with uncertainty increasing, there are concerns about rising prices—especially energy prices—and their negative impact on corporate profits and private consumption. These remarks indicate that the Bank of Japan is unwilling to commit to a rate hike just three weeks ahead of its next policy decision on April 28. Based on overnight swap market pricing, as of Monday traders believed the likelihood of a rate hike this month was about 66%, because the Iran war could pose greater upside inflation risks for Japan even as inflation remains persistently elevated. The Bank of Japan also noted that many reports indicate that companies continue to pass on rising costs such as labor and logistics expenses to sales prices. At the same time, companies continue to respond to consumers’ inflation fatigue by limiting the extent of price increases and strengthening their lineup of low-priced products. (Jin10 ) (Source: ODAILY)