BOJ to Consider Skipping Rate Hike at April Meeting

Tokyo, April 20 (Jiji Press)–The Bank of Japan will consider skipping an additional interest rate hike at its next policy-setting meeting on April 27-28, Jiji Press learned Monday. The move comes amid persistent uncertainties over prolonged tensions in the Middle East, informed sources said. The Japanese central bank is expected to reach a final decision at the upcoming Policy Board meeting, based on factors such as the outcome of peace talks between Iran and the United States. BOJ Governor Kazuo Ueda has said that soaring crude oil prices, brought on by the Middle East tensions, pose upside risks to prices and downside risks to the Japanese economy. There are also concerns that supply disruptions for oil-derived products could deliver a serious blow to the economy. According to the sources, the BOJ is leaning toward the view that it should carefully consider the timing of a rate hike due to the possibility that the supply disruptions may not be resolved immediately even if the United States and Iran reach a peace deal. Facing this situation, some within the BOJ believe that the central bank should wait at least until its June policy-setting meeting to implement a rate hike. In December last year, the central bank raised its policy interest rate to 0.75 pct. Nevertheless, Ueda has said that monetary conditions are “still very much accommodative.” Inflationary pressure could increase further if the BOJ falls behind the curve. END [Copyright The Jiji Press, Ltd.]