Bank of Japan debates near-term rate hike, eyes June move
The Bank of Japan held its short-term policy rate at 0.75% during its April 27-28 meeting, but the internal debate was anything but steady. Three of the nine board members broke ranks to advocate for a near-term rate increase, making this one of the most contentious BOJ gatherings in recent memory. The catalyst is familiar to anyone watching global energy markets: the ongoing conflict in the Middle East, particularly the Iran war, has sent oil prices climbing and forced the central bank to revise its core CPI forecast for fiscal 2026 upward to 2.8%. That is well above the BOJs 2% target, and it has some policymakers itching to act before inflation expectations become entrenched. A board divided One board member called for immediate rate hikes at upcoming meetings. Another member took a slightly more measured approach, suggesting increases every few months depending on how inflation data evolves. The bond market certainly noticed. Following the release of the hawkish summary, the 10-year Japanese government bond yield surged to a 29-year high. June is the markets best guess Polymarket data shows a 65.8% probability of a 25 basis point hike at the BOJs next meeting on June 15-16. A 25 basis point increase would bring the policy rate









