Sources indicate that the Middle East conflict may cause the Bank of Japan to postpone its interest rate hike in March; the only factor contributing to a rate hike would be a significant depreciation

CoinFeed reported on March 3rd that, according to sources cited by Jinshi, the renewed market volatility triggered by the Middle East conflict has increased the likelihood of the Bank of Japan (BOJ) postponing its interest rate hike in March, as policymakers need more time to assess its impact on the economy. The only factor that could prompt the BOJ to raise rates at its March 18-19 meeting is a significant depreciation of the yen. Previously, after the US strike on Iran, investors flocked to the safe-haven dollar, putting downward pressure on the yen and pushing it close to the 160 level. However, as the Middle East conflict escalates, impacting financial markets and pushing up oil prices, the recovery prospects of an economy heavily reliant on imported fuel have been clouded, raising the bar for a March rate hike. Sources indicated that the central bank is carefully assessing the impact of the new geopolitical crisis on monetary policy. Following BOJ Deputy Governor Ryozo Himino's failure to provide a clear signal regarding upcoming policy adjustments on Monday, the market also lowered its bets on a March rate hike.