Overview
- Investors now see roughly a 70% chance the Bank of Japan raises rates in April as higher oil costs and a weak yen push up import prices.
- Nobuyasu Atago, a former BOJ official, says the Iran war could trigger a supply shock, with likely naphtha shortages that would cut factory output and raise the risk of stagflation this summer.
- Atago urges the central bank to prepare emergency liquidity to keep credit flowing to markets and companies if the downturn deepens, rather than fixating on the next rate move.
- The Strait of Hormuz has been effectively shut by the conflict, choking a route that carries about a fifth of global oil and gas and driving up crude costs for import‑reliant Japan.
- New policymaker Asada says stagflation is hard to fix with interest rates alone and argues for a mix of central bank action and government spending, signaling a push for closer policy coordination.