Economists say the Bank of Japan (BOJ) may need to accelerate the pace of policy rate hikes after surging oil prices and a weaker yen heightened the risk of faster price growth, aiming to bring inflation back to the 2% target.
The Japanese yen hit a 31-year low against the US dollar, putting pressure on import costs. Meanwhile, sharp rises in global oil prices have driven up energy and raw material input costs, fueling concerns that inflation could spiral out of control.
According to experts, if the BOJ fails to act in time, risks from oil prices and exchange rates could prolong inflation more than expected. Some analysts forecast the BOJ will raise rates soon, possibly as early as next quarter, rather than waiting as previously planned.
The BOJ's upcoming decision will depend heavily on oil price and yen exchange rate movements. Investors are closely monitoring BOJ officials' remarks for signals on the monetary tightening timeline.
