Moody's: The Bank of Japan will remain inactive this week, possibly raising interest rates to 1% by mid-year

Moody's Analytics stated in a report that the Bank of Japan is expected to keep interest rates unchanged this week and may raise rates to 1% around mid-year. The report noted that the conflict in the Middle East has increased the risk of inflation re-accelerating, but the uncertainty brought by this conflict will lead the Bank of Japan to remain on hold for the time being.

The report also pointed out that if the yen weakens further, it may prompt the Bank of Japan to raise interest rates earlier later this year. However, slowing wage growth and unstable performance in actual economic data make it difficult to justify a radical rate hike path above 1%.