Capital Economics: Rising energy prices may prompt the Bank of Japan to raise interest rates in April

(1) Marcel Thieliant, Head of Asia-Pacific at Capital Economics, stated in a report that the Bank of Japan may raise its policy rate in April, citing rising energy prices. He pointed out that financial markets see little chance of a rate hike at next week's meeting, so he expects the central bank will not take action in March. (2) Thieliant analyzed that although the recent surge in crude oil prices will not push inflation to a level intolerable for the Bank of Japan, the strength of underlying inflation appears to be better than the central bank expected. He expects the central bank to raise its policy rate to 1.0% in April, rather than in June. (3) He further predicts that by the end of 2027, the Bank of Japan's policy rate will reach 1.75%, higher than the market's average expectation.