Former Bank of Japan board member Makoto Sakurai: The Bank of Japan is not expected to raise interest rates again this year

The Bank of Japan is not expected to raise interest rates again this year, according to Makoto Sakurai, a former board member of the Bank of Japan, given the recent rate hikes that triggered market turmoil and the low likelihood of a rapid economic recovery. “The central bank will not raise interest rates again at least for the rest of the year,” Makoto Sakurai said in an interview last Friday. “One more rate hike before the end of March next year cannot be ruled out.” The recent market turmoil and the Bank of Japan’s response have made market participants wary of the outlook. Money market pricing shows that the probability of the Bank of Japan raising interest rates this year has dropped significantly. Bank of Japan Deputy Governor Shinichi Uchida pledged not to raise interest rates when the market is unstable. “In the process of normalizing monetary policy, the central bank raised interest rates from near zero to 0.25%, which was a good decision,” Makoto Sakurai said. But this step is energy-intensive, so the central bank should wait and see for a while before further rate hikes, he added. (Global Market Report)