Mizuho Securities: Oil price shocks leave the Bank of Japan in a policy dilemma

```htmlGolden Ten Data reported on April 27 that Vishnu Varathan from Mizuho Securities stated that the oil price shock caused by the Middle East war could, on one hand, lead to demand destruction, and on the other, further exacerbate existing inflation risks. The Bank of Japan is expected to stand pat this week. The Bank of Japan is caught in a dilemma, as it remains unclear which risk will dominate and what countermeasures should be taken. High inflation preceding the Middle East crisis, combined with intense depreciation pressure on the yen, has limited the Bank of Japan's ability to preemptively loosen policy to offset potential growth shocks. Meanwhile, the Bank of Japan cannot raise rates too quickly or by too much, as doing so could undermine prospects for achieving sustainable and healthy reflation.```