The camp advocating for maintaining interest rates:
1. Rakuten Securities: Expects the Bank of Japan (BOJ) to maintain its current interest rate; given the current energy price shock, the central bank should ensure that necessary funds are provided to those in need, rather than raising rates.
2. ANZ Bank: Expects the BOJ to maintain its current interest rate; recent statements by senior BOJ officials have emphasized the downside risks to economic growth that developments in the Middle East could pose.
3. Capital Economics: Expects the BOJ to maintain its current interest rate; however, it may send some hawkish signals by raising its overall and core inflation forecasts, with a possible rate hike as early as June.
4. Mizuho Securities: Expects the BOJ to maintain its current interest rate; the war-induced oil price shock could damage demand and exacerbate existing inflation risks, putting the BOJ in a dilemma.
5. Goldman Sachs: Expects the BOJ to maintain its current interest rate; this meeting may lower its economic growth forecast and raise its inflation forecast for fiscal year 2026 to reflect the Middle East situation and rising oil prices. 6. Deutsche Bank: Expects the Bank of Japan (BOJ) to maintain interest rates. Numerous media reports suggest the BOJ will hold rates steady, which is the bank's message to the media that they have decided to postpone a rate hike.
7. Danske Bank: Expects the BOJ to maintain interest rates due to the uncertainty surrounding the economic and price outlook caused by the war. The timing of a rate hike will be delayed until June, at which point it will depend on developments in the energy market.
8. Sumitomo Mitsui Trust: Expects the BOJ to maintain interest rates. Given the BOJ's continued tightening policy stance, the BOJ may resume rate hikes in June or July.
Rate Hike Camp
1. Sumitomo Mitsui Banking Corporation: Expects the BOJ to raise interest rates to 1%. A 1% rate is still slightly below the neutral interest rate range, a level that is neither suppressive nor stimulative.
2. ING Bank: A rate hike by the BOJ is still possible because Japan's March CPI was higher than expected, and inflation is expected to accelerate further. The BOJ is expected to raise its inflation forecast for fiscal year 2026.
3. Daiwa Institute of Research: The Bank of Japan's early interest rate hike is a key measure to stabilize inflation expectations and maintain a gradual interest rate hike process; delaying the interest rate hike may have a serious impact on the economy due to rising inflation and further depreciation of the yen.
