The uncertainty of the Middle East conflict is hindering the Bank of Japan from issuing a clear interest rate signal.

The information conveyed by the Bank of Japan has led traders to believe that despite listing the Middle East conflict as an uncertain factor, the central bank will still raise interest rates this month. The key question is whether they will send a clear signal before taking action, as there may not be many opportunities to do so before the decision is announced on April 28th. This month, there are no scheduled speeches by any policy committee members of the bank, and the Governor Haruhiko Kuroda's only public speech was on April 13th. He is scheduled to speak as one of the keynote speakers at a conference, where his remarks are usually brief. How the Bank of Japan conveys its policy intentions before the April meeting is crucial. Traders currently estimate a 70% probability of a rate hike. Such a high expectation means that a rate hike would not come as a surprise, but if they hold off, it could potentially impact the already pressured global markets due to the situation in Iran.