Deutsche Bank: The cautious Bank of Japan may choose to delay interest rate hikes

Golden Ten Data reported on April 22 that numerous media outlets have stated that the Bank of Japan may keep interest rates unchanged next week, prompting Deutsche Bank strategists to postpone the expected rate hike to June. Alex Lu and others noted, “We believe this is information conveyed by the Bank of Japan through the media, indicating they have decided to delay the rate hike to avoid surprising the market.” Market pricing shows that the threshold for an unexpected move is extremely high. However, although the Bank of Japan may wait to assess the impact of the Middle East conflict, keeping rates unchanged is only a pause in the rate-hike cycle, not the end of it. Economic conditions require further policy tightening, as monetary policy remains very loose. The pricing of the terminal rate is still above 1.5%, reflecting the market's view that keeping rates steady only postpones the issue.