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

ME News message, April 6 (UTC+8). In its two quarterly regional economic reports, the Bank of Japan avoided fueling market expectations for a rate hike this month by sending highly subtle signals. In another news release summarizing the views of the presidents of its regional branches, the Bank of Japan said that looking ahead, amid rising uncertainty, there are concerns about price increases—especially energy prices—and their negative impact on corporate profits and private consumption. These remarks suggest that the Bank of Japan is unwilling to commit to a rate hike three weeks before the next interest rate decision on April 28. According to pricing in the overnight swap market, as of Monday, traders estimated the likelihood of a rate hike this month at about 66%, as the Iran war could bring greater upside inflation risks for Japan while inflation remains already 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 continue to respond to consumers’ inflation fatigue by limiting the size of price increases and strengthening their lineup of low-priced products. (Jin10) (Source: ODAILY)