The former chief economist of the Bank of Japan believes that there is a high possibility of interest rate hike this month.

According to the former Chief Economist of the Bank of Japan, Toshiyuki Ganken, the escalating conflict in Iran has increased the risk of inflation, providing a reason for the Bank of Japan to raise interest rates as early as this month. Ganken stated in an interview on Wednesday that taking action in April is feasible if the aim is to assess the situation. We can at least determine by the end of April whether the impact of the Middle East situation is only a temporary phenomenon. Although analysts are still debating whether geopolitical shocks will lead to inflation or deflation in a resource-poor country like Japan, Ganken's remarks suggest that the Bank of Japan may have a clearer judgment on the need for a rate hike at the policy meeting on April 28. Ganken, who served at the Bank of Japan for over 30 years until 2020, speculates that current central bank officials may share his views, as the minutes of the March policy meeting clearly show that members are increasingly focused on inflation risks.