Bank of Japan could increase interest rates before June due to inflation pressures heightened by the Iran conflict, according to its former chief economist
Bank of Japan Expected to Hike Rates by June Amid Rising Inflation Concerns
Seisaku Kameda, the former chief economist of the Bank of Japan, stated on Thursday that the central bank is likely to increase interest rates by June. This move comes as escalating oil prices, driven by the ongoing conflict in Iran, raise the risk of delayed action against surging inflation.
Kameda explained that unless the Iran conflict leads to a significant global downturn, the Bank of Japan will have limited options other than to implement further rate hikes. The recent oil price surge is expected to intensify inflationary pressures in Japan, where prices and wages are already on an upward trend.
He also noted that companies have shifted their approach to setting prices, making it easier for initial price increases to trigger subsequent rounds of inflation.
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