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4h ago

ECB April Cut Odds Vanish as BOJ Seen Holding Rates Next Week

Energy price shocks raise inflation risk, keeping policy on hold into June.

A man walks past the Bank of Japan headquarters in Tokyo, Japan, December 18, 2025. REUTERS/Kim Kyung-Hoon
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Overview

  • The Bank of Japan, which sources told Reuters Monday is likely to keep rates unchanged at its April 27–28 meeting, could signal readiness to raise borrowing costs by June.
  • Prediction markets price a 0.2% chance of a 50 basis point ECB cut on April 30, with only about $51 needed to move the price five points due to thin trading.
  • ECB Governing Council member Demarco urged caution before the April 30 decision and said more complete data will come by June.
  • Barclays pushed its expected ECB rate increases to June and September 2026 after Eurozone inflation rose to 2.6% in March from 1.9% in February.
  • A BOJ survey found 83% of Japanese households expect higher prices and see 10–11% inflation over the next year, a view that makes a rate cut very unlikely.