Japan's Central Bank Expected to Raise Interest Rates, Analyst Says

On April 23, MFS Investment Management analyst Carl Ang stated that the Bank of Japan is expected to increase its policy rate from the current 0.75% to 1% in June. According to Jin10, Ang mentioned that the central bank plans to continue raising rates every six months until reaching a terminal rate of 1.75%. He noted that Japan's new consumer inflation indicator shows underlying price growth slightly below the bank's 2% target, which could justify further rate hikes. Additionally, Ang highlighted that the recent output gap has been revised from negative to positive, indicating that Japan's economic activity level has surpassed its potential.