Japan's Strong Q1 GDP May Lead to June Rate Hike, Economist Says

Japan's stronger-than-expected first-quarter GDP growth has increased the likelihood of a rate hike by the Bank of Japan in June, according to Krishna Bhimavarapu, an economist at State Street Global Advisors for the Asia-Pacific region. According to Jin10, the initial figures released by the Japanese government showed a 0.5% quarter-on-quarter increase in real GDP for the first quarter, surpassing economists' expectations of 0.4%. Bhimavarapu noted that the Bank of Japan appears well-positioned to act independently, supported by robust domestic growth momentum and the global AI cycle, which is enhancing the vitality of economies worldwide. He added that the next rate hike could be another significant event following the shift first observed in July 2024.