Former BOJ Official Predicts 50% Chance of April Rate Hike Amid Iran Conflict Uncertainty

Eiji Maeda, a former official responsible for monetary policy at the Bank of Japan (BOJ), has indicated that despite the uncertainties arising from the Iran conflict, there is still a 50% probability of a rate hike by the BOJ next month following the decision to maintain rates in March. According to Jin10, Maeda stated, "The next rate hike is likely to occur in either April or June. Given the current uncertainties, both possibilities are roughly equal. This presents an extremely challenging situation for the BOJ." He further noted that due to rising risks of lagging inflation, an April rate hike would be more prudent. His view aligns with the general market expectation, as the overnight swap market shows traders believe there is about a 60% chance of a rate hike in April. Maeda pointed out, "If the BOJ does not act in April, the yen may weaken further. If it breaks 160 against the dollar, it will increase the risk of lagging behind market trends." Even at current levels, the yen is "quite weak," and a slight adjustment would be more comfortable for Japanese businesses and households.