Institution: Bank of Japan Expected to Raise Interest Rates to 1% in June Meeting

On April 23, Carl Ang, an analyst at MFS Investment Management, stated that the Bank of Japan is expected to raise its policy interest rate from the current 0.75% to 1% in June, followed by further increases every six months until reaching a terminal rate of 1.75%. Ang noted that the Bank of Japan’s new consumer inflation indicator shows that underlying price growth is just below the 2% target set by the bank, which can serve as a basis for further rate hikes. The analyst also pointed out that the recent output gap has shifted from negative to positive, indicating that the Japanese economy is operating above its potential level. (Jin Shi)