Moody's Analysis: Bank of Japan Likely to Maintain Rates Amid Middle East Conflict

Moody's Analytics has released a report indicating that the Bank of Japan is expected to keep interest rates unchanged this week. According to Jin10, the report suggests that the central bank might consider raising rates to 1% around mid-year. The ongoing conflict in the Middle East has heightened the risk of inflation accelerating again, but the uncertainty stemming from the conflict is likely to keep the Bank of Japan on hold for now. The report also highlights that a further weakening of the yen could prompt the Bank of Japan to raise rates earlier, possibly later this year. However, the slowdown in wage growth and unstable real economic data make it challenging to justify an aggressive rate hike path above 1%.