Overview
- Traders raised the chance of a June move to roughly three-quarters after Tuesday’s Summary of Opinions, and the 10-year Japanese government bond yield jumped to a 29-year high.
- At the April 27–28 meeting the Bank of Japan kept the policy rate at 0.75% in a 6–3 vote, with three board members calling for a hike and some saying increases could start as soon as the next meeting.
- Private members of Japan’s economic policy council on Monday urged the BOJ to weigh funding strains for smaller firms and to coordinate with the government, noting companies boosted backup credit lines by 2.5 trillion yen in March to secure cash.
- The OECD on Wednesday projected the BOJ’s rate could reach about 2% by end-2027 and backed steady increases, advising the bank to stay ready to change the pace and maturities of its bond purchases if market strains flare.
- The June 15–16 meeting is now the focal point for any rate increase and an update to the bond-buying plan, and a move to higher rates could lift borrowing costs for small businesses and spur unwinds of yen-funded trades across global markets.