The Bank of Japan signals subtly to avoid committing to a rate hike before the April meeting

ME News message, April 6 (UTC+8): The Bank of Japan, in its two quarterly regional economic reports, avoided fueling market expectations that it will raise rates this month by sending highly subtle signals through its two quarterly regional economic reports. In another press release summarizing the views of regional branch presidents, the BOJ said that looking ahead, amid rising uncertainty, people are concerned about price increases, especially energy prices, and their negative impact on corporate profits and private consumption. These comments suggest that the BOJ is unwilling to commit to a rate hike with just three weeks left before its next interest rate decision on April 28. Based on pricing in the overnight swap market, as of Monday, traders estimated the likelihood of a rate hike this month at about 66%, because the Iran war could pose greater upside inflation risks for Japan while inflation is already persistently elevated. The BOJ also said 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 size of price increases and strengthening their lineup of low-priced products. (Jin10) (Source: ODAILY)