Former Bank of Japan official: The probability of the Bank of Japan raising interest rates in April remains around 50%

Odaily Planet Daily reports that Eiji Maeda, a former official responsible for monetary policy at the Bank of Japan, stated that even if the Iran conflict introduces new uncertainties, the probability of the Bank of Japan raising interest rates next month remains about 50% after holding rates steady in March. He said, “The next rate hike is most likely to occur in April or June. Considering the current uncertainties, each possibility accounts for roughly half. This is an extremely difficult situation for the Bank of Japan.” He also mentioned that due to rising risks of inflation lagging behind, a rate hike in April would be more prudent. His view aligns with market expectations, as the overnight swap market indicates traders see about a 60% chance of a rate hike in April. Maeda pointed out, “If the Bank of Japan does not act in April, the yen could weaken further. If it breaks above 160 against the dollar, it will increase the risk of lagging behind market trends.” Even at current levels, the yen is “quite weak,” and a slight correction would be more comfortable for Japanese businesses and households. (Jin10)