On May 22, Abhijit Surya, a senior economist at Capital Economics Asia Pacific, stated that a series of data this week indicates that the Japanese economy has enough resilience to support further interest rate hikes. Surya mentioned that due to the global energy crisis, the economy is likely to lose momentum, but there are signs that the slowdown may not be very severe. As of mid-May, Japan's fuel consumption reserves could cover 206 days, and the pace of inventory consumption has significantly slowed. This suggests that refiners may have made progress in securing non-Middle Eastern supplies. Meanwhile, price pressures are becoming more widespread, with preliminary PMI data indicating that core goods inflation could approach 8% by the end of 2026. Capital Economics now expects the Bank of Japan to tighten policy more aggressively, raising the policy rate to a terminal level of 2% by the end of 2027, approximately every four months.