Preview of the Bank of Japan's June Rate Decision

On June 16, ① the market widely expects the Bank of Japan to raise the benchmark interest rate by 0.25 percentage points to 1%. If this rate hike occurs as anticipated, it will reach the highest level since 1995. ② Attention is focused on the impact of Governor Kazuo Ueda's absence due to illness. There is interest in the content of his written opinions submitted during his absence and the potential influence of his non-participation in the voting on the decision's outcome. ③ The policy stance of Deputy Governor Shinichi Uchida, who will preside over the press conference, is under scrutiny, particularly whether his statements will be more straightforward than those of Ueda, and how the market will interpret the future policy signals he conveys. ④ The Bank of Japan's perspective on the yen's fluctuation around the critical threshold of 160 yen per dollar is also a point of interest. ⑤ Additionally, the Bank's assessment of the inflationary risks arising from the Middle East conflict and currency depreciation, and how it seeks a delicate balance between 'avoiding angering the Kishida government' and 'preventing slow action' is being closely monitored.