It is reported that the Bank of Japan is inclined to not raise interest rates in April, but will maintain a tight monetary policy stance.

According to sources familiar with the matter, the Bank of Japan may maintain its interest rates unchanged next week due to the uncertainty brought by the Iran war. However, officials are still determined to raise borrowing costs in the near future. With the financial environment still being loose, the bank may stick to its stance that it must continue to raise the benchmark interest rate as long as conditions allow, even though the decision on April 28 was to maintain the overnight rate at 0.75%. These sources indicate an increased likelihood of taking action in June, provided that economic conditions remain stable. Some officials are still inclined to raise rates at the upcoming meeting as they anticipate that geopolitical shocks will push up prices. According to another report earlier this month, the Bank of Japan is also considering significantly raising its inflation expectations at this meeting. The officials added that they will continue to monitor the US-Iran conflict until the last moment before making a final policy decision.