Former Policy Board member of the Bank of Japan, Seiji Ando, said on Tuesday that the Bank of Japan is likely to raise interest rates before July because the Middle East war has sent oil costs soaring, increasing the risk that the central bank will fall behind the curve in responding to mounting inflation pressures. Ando said the core inflation rate has reached the Bank’s 2% target, and that last week’s Tankan survey showed that companies’ five-year inflation expectations reached 2.5%. He said that the surge in oil prices and supply restrictions caused by the Iran war provide additional justification for the central bank to raise its short-term policy rate from the current 0.75% soon. He said, “The Bank of Japan should raise interest rates to a level that is neutral for the economy as soon as possible,” adding that Japan’s neutral interest rate may be around 1.25%. However, Ando said the likelihood of a rate hike in April is “50%,” because the Iran war keeps markets volatile and makes Japan’s fragile economic outlook unclear. #Gate广场四月发帖挑战