Moody's: Bank of Japan May Raise Interest Rates to 1% by Mid-Year

Moody’s Analytics stated in a report that it expects the Bank of Japan to keep interest rates unchanged this week and possibly raise them to 1% around mid-year. The agency said that the Middle East conflict has increased the risk of inflation accelerating again, but the uncertainty caused by the conflict will keep the Bank of Japan on hold. The agency noted that a further weakening of the yen could prompt the Bank of Japan to raise rates earlier later this year. However, it added that slowing wage growth and sluggish economic data make it difficult to support a more aggressive rate hike above 1%. The Bank of Japan will announce its interest rate decision on Thursday.