Japan’s inflation is surprisingly strong, increasing the possibility that the Bank of Japan will raise its interest rate by the end of the year, according to one of the country’s leading inflation experts.
"It’s beyond my expectation and very strong this year,” said Tsutomu Watanabe, an emeritus economics professor at the University of Tokyo, in an interview Friday. "There is no mistake that the BOJ will raise its forecast for this fiscal year” in its quarterly outlook report at the end of the month.
Watanabe’s remarks are likely to feed market expectations for another interest rate hike this year. The latest government data showed the cost of living re-accelerating to a fresh two-year high in May, although BOJ Gov. Kazuo Ueda has made it clear that he wants to confirm the level of economic impacts from U.S. tariffs in data before moving the rate again.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.