The Bank of Japan will probably wait until the middle of the year before raising interest rates again as it looks to maintain a pace of one hike every six months despite recent market speculation of an earlier move, a former central bank official said.
"June is the favored option in my base case,” Kazuo Momma, a former executive director in charge of monetary policy at the BOJ, said in an interview Monday. "It may get pushed back to September or later” depending on economic and financial market conditions, he added.
Momma’s comments come amid an uptick in market speculation that the central bank may move in May on the back of solid economic data. He sees the likelihood of an early hike as low as it would require a clear risk of falling behind the curve due to a rapid weakening of the yen or much stronger results in annual wage talks.
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