Michio Saito: Bank of Japan may be more cautious in raising interest rates due to energy risks

According to Jin10 Data on May 28th, the pricing of the swap market shows that traders expect the probability of the Bank of Japan raising interest rates in June to be about 75%, and in July to reach 92%. Michio Saito from Nomura Capital Markets Research Institute said that the Iran war could push up oil prices, drag down the Japanese economy, and make the central bank more cautious about raising interest rates. He pointed out that the yield of Japanese 10-year treasury bond rose to 2.8% on May 18, the highest since 1996, and the reasonable range should be 2.0% -2.5%. If the Strait of Hormuz is closed, energy supply concerns may pose a risk of stagnation to Japan's economic activities.