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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