Former Bank of Japan policy board member: Due to increased inflation pressures, the central bank may raise interest rates before July.

Odaily Planet Daily News: A former policy board deliberation 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 caused oil costs to surge, increasing the risk that the central bank will fall behind the curve in addressing growing inflation pressures. Ando said that the core inflation rate has reached the BOJ’s 2% target, and that last week’s Tankan survey showed five-year corporate inflation expectations at 2.5%. He said that the surge in oil prices and supply constraints caused by the Iran war give the central bank more reason to raise its short-term policy rate from the current 0.75% soon. He said, “The Bank of Japan should raise 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 was “50%,” because the Iran war keeps markets volatile and makes Japan’s fragile economic outlook more unclear. (Jin 10)