The war in Iran is raising upside risks for inflation, bolstering the case for the Bank of Japan to raise interest rates as soon as this month, according to a former BOJ chief economist.
¡°If the idea is to have assessed the situation, I think it would be fine to move in April,¡± Toshitaka Sekine, the former chief economist, said in an interview Wednesday. ¡°We will at least know whether the fallout of the Middle East will be short-lived by the end of April.¡±
While pundits continue to debate whether the impact of the geopolitical shock is inflationary or deflationary for a resource-scarce nation such as Japan, Sekine¡¯s remarks suggest there¡¯s a chance the BOJ will have more conviction on the need for a rate hike when it sets policy on April 28.
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