BOJ June Rate Hike Outlook and Ueda Hawkish Remarks

Mizuho Securities argues that BOJ Governor Ueda's recent hawkish rhetoric and media reports suggest a strong likelihood of a policy rate hike at the June 15-16 meeting. This shift focuses on mitigating upside inflation risks despite lingering global uncertainties.

Key Takeaways

• 1.Bank of Japan (BOJ) Governor Ueda's recent comments are interpreted as hawkish, signaling a shift toward addressing upside inflation risks with a potential rate hike in June.
• 2.Market expectations for a June hike are very high, with OIS-implied probabilities reaching nearly 90%.
• 3.Political resistance from the Takaichi administration appears to be softening, potentially allowing the BOJ more autonomy to hike rates despite yen weakness and fiscal concerns.

Table of Contents

• Macro Information
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