The Bank of Japan (BOJ) is likely to keep interest rates unchanged at its meeting next week due to uncertainty stemming from the Iran conflict, but remains open to the possibility of raising rates in the short term.
Sources indicate that the Bank of Japan (BOJ) will continue to monitor the US-Iran conflict until the last minute before finalizing its decision on April 28. If it remains unchanged, the overnight interest rate will likely stay at 0.75%.
Nevertheless, some officials still want to raise interest rates at the upcoming meeting due to concerns that geopolitical shocks could push prices higher. Given the current loose financial conditions, the BOJ maintains its stance that it should continue to raise the benchmark interest rate whenever conditions permit.
Sources also indicate that the likelihood of the BOJ taking action in June is increasing, provided the Japanese economy remains stable. Furthermore, the central bank is considering significantly upward revisions to its inflation forecast at this meeting.
