Japan Weekly: Strong inflation will prompt further policy tightening

At its meeting next week, the Bank of Japan will reportedly push back the timing for meeting its 2% inflation target on a sustained basis. That would be a mistake though as the fallout from global trade tensions looks set to be modest. And while the provision of free high school services will muddy the waters, inflation is set to surpass the Board’s January forecast by a sizeable margin. The upshot is that we still expect the Bank to hike rates to an above-consensus 1.5% by 2027.