Japan's Central Bank Likely to Maintain Rates, Deutsche Bank Strategists Say

On April 22, Jin10 reported that numerous media outlets suggest the Bank of Japan may keep interest rates unchanged next week. This has led Deutsche Bank strategists, including Alex Lu, to postpone their rate hike expectations to June. According to Jin10, Lu and his colleagues believe the Bank of Japan is signaling through media that it has decided to delay rate hikes to avoid surprising the market. Market pricing indicates a high threshold for unexpected changes, but despite the possibility of the Bank of Japan waiting to assess the impact of the Middle East conflict, maintaining rates is seen as a pause in the rate hike cycle rather than its conclusion. Economic conditions necessitate further policy tightening, as monetary policy remains very loose. The pricing of terminal rates remains above 1.5%, reflecting the market's view that keeping rates unchanged merely postpones the issue.