The summary of the Bank of Japan’s June policy meeting (headlines here from earlier) shows some members urged keeping rates steady due to uncertainty over the impact of U.S. tariffs on Japan’s economy.
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Others argued that inflation was stronger than expected, with one suggesting the BOJ may need to raise rates “decisively” despite economic risks.
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The BOJ held its benchmark rate at 0.5% and signalled a slower balance sheet reduction from next year, reflecting a cautious policy stance.
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Several board members warned that the economic effects of U.S. tariffs haven’t fully emerged but are likely to weaken business sentiment.
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One policymaker described Japan’s economy as “somewhat stagnant” even before the full tariff impact is felt.
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Concerns were also raised about rising domestic inflation, particularly due to sharply higher rice prices, which could shift consumer expectations.
A small majority of analysts in recent polling expect the next hike in 2026.
Earlier:
This article was written by Eamonn Sheridan at www.forexlive.com.
