Institution: Japan's output gap remains positive, which may support further interest rate hikes.

Gold Finance reported that on July 6, SMBC Nikko Securities economist Yoshimasa Maruyama stated that the Bank of Japan's estimate of the output gap for the first quarter showed a stable positive trend, which helps push inflation higher. He pointed out that this data can be seen as supporting further interest rate hikes. However, he added that the positive output gap has not expanded, indicating that there is currently no urgent need to accelerate the pace of monetary tightening. "If the pace of rate hikes or the magnitude of increases need to be accelerated in the future, it may stem from the lagging but significant transmission effects of inflationary pressures caused by the situation in the Middle East, or a rise in inflation expectations," he said.
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