A Bank of Japan rate hike in May would likely be too early given the need to assess the impact of U.S. tariffs set to come into effect in early April and ongoing wage talks, according to the policy chief of a small but powerful opposition party.
"That judgment needs to be based on a thorough understanding of the impact of the U.S. tariff policies, as well as how regional economies are faring and whether smaller businesses are raising wages,” Kazuya Shimba, Secretary General of the Democratic Party for the People said on Tuesday, adding that a May rate hike would be too early.
Most economists see the next increase in borrowing costs coming in June or July, but many have said a May hike is possible, given data including around three years of inflation running above 2%.
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