Former Bank of Japan Policy Board member: Due to increased inflationary pressures, the central bank may raise interest rates before July.

Mars Finance News: Former Policy Board review committee member of the Bank of Japan, Seiji Anda, said on Tuesday that the Bank of Japan is very likely to raise interest rates before July because the Middle East war has caused oil costs to skyrocket, increasing the risk that the central bank will fall behind the curve in addressing the growing inflation pressure. Anda said the core inflation rate has already reached the Bank of Japan’s 2% target, and last week’s Tankan survey showed that businesses’ five-year inflation expectations reached 2.5%. He said that the surge in oil prices and supply constraints caused by the Iran war provide more justification for the central bank to quickly raise its short-term policy rate from the current 0.75%. He said, “The Bank of Japan should raise interest rates to a level that is neutral for the economy as soon as possible,” adding that Japan’s neutral interest rate could be around 1.25%. However, Anda said the likelihood of a rate hike in April “stands at 50%” because the Iran war keeps markets volatile and makes Japan’s fragile economic outlook more unclear.