The Bank of Japan won’t be able to raise the policy rate again this year, given the market turmoil that followed its recent hike and the low likelihood of the nation’s economy seeing a rapid recovery, according to a former board member.
"They won’t be able to hike again, at least for the rest of the year,” former board member Makoto Sakurai said in an interview late Friday. "It’s a toss-up whether they can do one hike by next March.”
The recent market upheaval and the BOJ’s reaction to it are making market participants wary about the outlook. The overnight index swap market is showing a much lower likelihood of a rate hike by the end of the year, compared with immediately after the BOJ’s move in July.
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