TechFlow News, March 6: Eiji Maeda, former Bank of Japan (BOJ) official in charge of monetary policy, stated that even amid new uncertainties arising from the Iran conflict, the probability of a BOJ rate hike next month—following its decision to hold rates steady in March—remains around 50%. He said: “The next rate hike is most likely to occur in either April or June. Given current uncertainties, both scenarios are roughly equally probable. For the BOJ, this is an extremely difficult situation.” He added that raising rates in April would be more prudent, given rising risks of falling behind on inflation.
His view aligns with broad market expectations; overnight swap markets indicate traders assign approximately a 60% probability to a rate hike in April. Maeda noted: “If the BOJ does not act in April, the yen could weaken further. A break below 160 against the U.S. dollar would heighten the risk of falling behind market trends.” Even at current levels, the yen is “already quite weak,” and a modest rebound would be more comfortable for Japanese businesses and households. (Jinshi)
