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Bank of Japan expected to hold rates amid Iran war-driven inflation fears
The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT. The BoJ is widely expected to deliver a hawkish hold, keeping the benchmark interest rate unchanged at 0.75% while also hinting at a willingness to hike rates. The Bank of Japan is expected to keep rates on hold, but a hike is not off the table.Uncertainty spurring from the Middle East war will take its toll on the decision. Macro fundamentals back the case for additional rate hikes in Japan.The Bank of Japan (BoJ) will announce its monetary policy decision on Tuesday, at around 3:00 GMT. The BoJ is widely expected to deliver a hawkish hold, keeping the benchmark interest rate unchanged at 0.75% while also hinting at a willingness to hike rates. The latest change in interest rates took place in December, when BoJ officials hiked by 25 basis points (bps)Japanese policymakers are between a rock and a hard place: The Middle East war is a global source of uncertainty, while the local macro puts pressure on policymakers to act promptly. Hotter-than-expected inflation and a tightening labor market hint at faster interest rate hikes, which run counter to the BoJ officials' views. In the meantime, the Middle East war continues. Hopes for a quick resolution fade as time goes by, with the war about to turn two months old. What to expect from the BoJ interest rate decision?According to the latest available data, the Consumer Price Index (CPI) rose 1.5% YoY in March, up from 1.3% in February and above the 1.4% anticipated by market players. Core annual inflation, which excludes volatile food and energy prices, rose to 1.8%, up from the expected 1.5%. Meanwhile, the Unemployment Rate stood at 2.6% in February.If the BoJ could base monetary policy solely on these data, policymakers should pull the trigger in this meeting. However, the ongoing crisis in the Middle East paints a different picture. Rising Oil prices and persistent supply disruptions are expected to have a profound and prolonged impact on inflation worldwide. Japan is no exception. That opens the door for a surprise interest rate hike, although we are talking about Japan, and surprises are not usually in their script. Policymakers are well aware of the situation. In a press conference in Washington following the 20-G meeting, BoJ Governor Kazuo Ueda noted that higher Oil prices “pose both upside risks to prices and downside risks to the economy, making policy responses difficult.” Ueda added: “Developments in ...
GTJPY2Y Analysis - Japan Government Two Year Bond - Bloomberg
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Bank of Japan keeps rates steady but hawkish split points to June ... - MSN
By Leika Kihara and Makiko Yamazaki TOKYO, April 28 (Reuters) - The Bank of Japan kept interest rates steady on Tuesday but three of its nine-member board proposed hiking borrowing costs ...
Bank of Japan's Hawkish Hold Expected: Inflation and Growth Pull in ...
Why is the Bank of Japan expected to hold rates in April 2026? The BOJ is expected to hold rates at 0.75% given heightened uncertainty from the Middle East conflict, which simultaneously pushes inflation higher and weighs on growth. Until the impact of energy prices on the broader economy becomes clearer, the central bank has opted for a wait-and-see approach.
