Overview
- Japanese government bond yields jumped to a 29‑year high on Tuesday after a Bank of Japan summary signaled a possible rate increase as soon as the June 15–16 meeting.
- On Wednesday, the OECD projected the BOJ’s policy rate could reach about 2% by the end of 2027, backing further gradual increases as wages rise and domestic demand stays firm.
- Private‑sector members of the government’s advisory council urged caution on Monday, asking the BOJ to weigh signs of funding strain at small and midsize firms as energy costs climb.
- BOJ data show companies are building cash buffers, with contracts for commitment lines rising by 2.5 trillion yen in March, the biggest monthly increase since May 2020.
- The BOJ’s recent Financial System Report flagged weak spots at non‑bank lenders and warned that higher energy prices tied to Middle East tensions could raise default risks, a backdrop that also makes yen‑funded carry trades and crypto markets more vulnerable if Japanese rates rise.