The Bank of Japan report mentions dual risks, leaving room for this month's decision.

The Bank of Japan maintained a very subtle stance in two quarterly regional economic reports, avoiding exacerbating market expectations for a rate hike this month. In the "Sakura Report" released on Monday, the Bank of Japan kept its economic assessment unchanged for all nine regions, stating that the economies in each region are in a recovery or rebound phase. At the same time, the central bank also noted that cautious sentiment in response to the impact of the Middle East conflict is beginning to emerge in relevant regions. In another announcement summarizing the views of branch managers, the Bank of Japan stated: "Looking ahead, uncertainty is increasing, and concerns have been expressed about rising prices and their negative impact on corporate profits and consumer spending." This statement indicates that the Bank of Japan is unwilling to corner itself before the next policy decision in three weeks. As of Monday, pricing in the overnight indexed swap market showed that traders estimated a 66% probability of a rate hike by the Bank of Japan this month. Against the backdrop of overall high inflation, the conflict in Iran could exacerbate the upward inflation risk in this resource-scarce country. The Bank of Japan stated in the report: "In terms of pricing, multiple reports indicate that businesses continue to pass on rising costs of labor, logistics, etc. to sales prices. Companies in raw material-related industries have stated that due to the recent depreciation of the yen and surging oil prices, there are plans or considerations to further raise prices in the future." At the same time, the report also pointed out that businesses are still addressing consumer inflation fatigue by controlling the magnitude of price increases and expanding their range of lower-priced products.