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Former Bank of Japan (BOJ) official: Probability of an interest rate hike in April remains around 50% Bank of Japan (BOJ)
Svmuu News: Eiji Maeda, a former Bank of Japan (BOJ) official in charge of monetary policy, said that even with the new uncertainty brought by the conflict in Iran, the probability of a rate hike next month remains around 50% after the Bank of Japan (BOJ)kept rates unchanged in March. He said, “The next rate hike will likely come in April or June.Given the current uncertainty, the odds are roughly even for both possibilities. For the Bank of Japan (BOJ), this is an extremely difficult situation.” He noted that a rate hike in April would be more prudent due to rising risks of inflation lagging behind. His view aligns with broad market expectations; the overnight swap market indicates that traders see a roughly 60% probability of a rate hike in April.Maeda noted: “If the Bank of Japan (BOJ) does not act in April, the yen could weaken further. A break above 160 against the dollar would increase the risk of falling behind market trends.” Even at current levels, the yen is already “quite weak,” and a slight pullback would be more comfortable for Japanese businesses and households. (Jin Shi)
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