Former Bank of Japan Policy Board Member: Due to Increasing Price Pressures, the Central Bank May Raise Interest Rates Before July

Golden Ten Data, April 7 – Former Bank of Japan Policy Board member Seiji Anda said on Tuesday that the Bank of Japan is likely to raise interest rates before July, as the Middle East war has caused oil costs to surge, increasing the risk that the central bank will fall behind the curve in dealing with mounting inflationary pressures. Anda stated that the core inflation rate has already reached the Bank's 2% target, and last week's Tankan survey showed that companies' five-year inflation expectations have reached 2.5%. He said that the sharp rise in oil prices and supply constraints caused by the Iran war give the central bank even more reason to soon raise its short-term policy rate from the current 0.75%. “The Bank of Japan would do best to raise rates to a neutral level for the economy as soon as possible,” he said, adding that Japan's neutral rate is likely to be around 1.25%. However, Anda said the probability of a rate hike in April is “about 50%,” as the Iran war keeps markets volatile and clouds Japan’s fragile economic outlook.