Strong GDP May Yet Prompt Rate Rise

The possibility of the Bank of Japan (BoJ) raising its overnight call rate by 25bps to 0.50% at its February 20-21 meeting has been boosted by stronger than expected Q406 GDP data, which showed the economy expanding at an annualised rate of 4.8% (1.2% q-o-q). However, we caution that with inflation still so low, and with the BoJ having demonstrated its willingness to succumb to political pressure, a rate hike is far from

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