Macquarie: The timing of the Bank of Japan's interest rate hike remains unclear, with risks leaning towards an earlier pace.

Macquarie analysts say the timing of the Bank of Japan's next move is more uncertain than ever, given the uncertainties surrounding the Middle East conflict and energy prices. This week, the central bank chose to keep interest rates unchanged, while leaving the door open for further tightening in the coming months. Governor Kazuo Ueda pointed out the risk that rising oil prices could worsen terms of trade, drag down the economy, and push up inflation expectations. The Macquarie team expects the Bank of Japan to remain patient during this period of uncertainty, believing the next rate hike is likely in July. Nevertheless, the risk lies in acting sooner, especially if the yen continues to depreciate. (Jinshi)