BOJ plans to hike interest rates while monitoring potential impacts from the Iran conflict, according to a central bank representative
BOJ Plans Further Rate Hikes Amid Middle East Uncertainty
A senior official from the Bank of Japan announced on Friday that the central bank intends to continue increasing interest rates, all while carefully monitoring the economic impact and inflationary pressures stemming from the ongoing conflict in the Middle East.
Koji Nakamura, the executive director responsible for monetary policy at the BOJ, explained to parliament that higher energy prices resulting from the conflict could negatively affect Japan’s economy by worsening its trade balance. However, he also noted that these rising costs may drive up core inflation, as they are likely to influence long-term inflation expectations.
Nakamura pointed out that the effect of increased fuel prices on underlying inflation could be more pronounced than in previous years, given that businesses are now more likely to pass these costs on to consumers.
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