Kea投宏观 Asia-Pacific Senior Economist Surya stated that data this week shows the Japanese economy is resilient and has room for further interest rate hikes. The global energy crisis will weaken growth but slowdowns are not fatal. As of mid-May, Japan's fuel reserves cover 206 days, inventory depletion has slowed, and refiners have made progress in securing non-Middle Eastern supplies. Price pressures are spreading, and the initial PMI points to core goods inflation approaching 8% by the end of 2026. Kea投宏观 expects the Bank of Japan to tighten roughly every four months, with rates rising to 2% by the end of 2027.

DeepFlowTech

2026-05-22 07:36:29

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Deep Tide TechFlow News, May 22, Keon Macro Asia-Pacific Senior Economist Abhijit Surya stated that a series of data this week indicates that the Japanese economy has enough resilience to support further interest rate hikes. Surya said that due to the global energy crisis, the economy is bound to lose momentum, but there are signs that the slowdown may not be very severe. As of mid-May, Japan's fuel consumption reserves could cover 206 days, and the rate of inventory depletion has slowed significantly. This suggests that refiners may have made progress in ensuring non-Middle Eastern supplies. Meanwhile, price pressures are becoming more widespread, with PMI initial data indicating that by the end of 2026, core commodity inflation could approach 8%. Keon Macro now expects the Bank of Japan to tighten policy more actively at a pace of about once every four months, raising the policy rate to a terminal level of 2% by the end of 2027. (Jin10)

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Kea投宏观: The Bank of Japan may raise interest rates to 2% by the end of 2027

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