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

ME News report, April 6 (UTC+8). In two quarterly regional economic reports, the Bank of Japan avoided stoking market expectations for a potential rate hike this month by sending highly delicate signals. In another news release summarizing the views of regional bank presidents, the Bank of Japan said 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 comments suggest the Bank of Japan is unwilling to commit to a rate hike three weeks ahead of its next rate decision on April 28. Based on pricing in the overnight swap market, as of Monday, traders assessed the probability of a rate hike this month at about 66%, as the Iran war could pose greater upside inflation risks for Japan at a time when inflation is already staying 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 are continuing to respond to consumers’ inflation fatigue by limiting the size of price increases and by strengthening their range of low-priced products.

(Jin10) (Source: ODAILY)