Bank of Japan expected to raise interest rates in June
The Bank of Japan is likely to raise its short-term policy rate to 1% from 0.75% at its June 16 meeting. Policymakers are monitoring Middle East tensions and rising wholesale prices as they shift toward a more hawkish stance to combat persistent inflationary pressures.
The Bank of Japan is expected to raise its short-term policy rate to 1% from 0.75% during its meeting ending June 16. This move would bring interest rates to their highest level since 1995 as the Bank of Japan addresses mounting inflationary pressures. The decision follows a series of rate hikes, including a December increase and the 2024 exit from a decade-long stimulus program.
Markets price an 80% probability of a hike as rising energy costs from the conflict in Iran fuel price pressures. Three people familiar with the matter said the move depends on avoiding a sharp escalation in Middle East hostilities. Governor Kazuo Ueda signaled the shift during a speech on Wednesday morning.
