Asia-Pacific economist flags synchronized rate hikes as inflation pressures build

Central banks may be moving toward a synchronized tightening phase as stronger economic resilience and firmer inflation reshape policy expectations, according to State Street Global Advisors Asia-Pacific economist Krishna Bhimavarapu. He said the Bank of Japan appears prepared to lift rates to the psychologically important 1.0% level, which would be the highest in 31 years, and could signal a second hike this year. He also said the Reserve Bank of Australia may pause for now but still has room for at least one more increase later this year, while the Federal Reserve may adopt a more hawkish stance by the end of this week. Higher Japanese rates could disrupt yen carry trades, alter global capital flows and add volatility across asset classes, including crypto, if investors unwind leveraged positions and repatriate capital.