Analyst: Bank of Japan May Still Intend to Raise Interest Rates Further

On June 16, Takashi Fujiwara, Chief Fund Manager at Resona Asset Management, stated that the Bank of Japan clearly indicated in its statement that short- to medium-term real interest rates are negative. This may suggest that the Bank of Japan does not want long-term bond yields to rise further. At the same time, it could also be a signal from the Bank of Japan: if short- to medium-term rates remain low, companies can easily raise funds and may expand their businesses into higher-risk areas. The Bank of Japan discussed the economy and prices in parallel in its statement. This may imply that the Bank of Japan has a willingness to raise interest rates further. Even if price increases slow down due to the reopening of the Strait of Hormuz, the Bank of Japan can still use economic growth as a justification for rate hikes.