BOJ to raise policy rate to 1% on Tuesday
The BOJ is expected to raise its policy rate 25bp to 1.00% at Tuesday’s meeting, the highest level in 31 years.
This move would be the first since December 2025. A 25bp hike with unchanged forward guidance is the most likely outcome, but the vote split and potential bond taper pause are key factors to watch.
The bond taper pause could remove upward yield pressure, but raises questions about BOJ independence. Markets will be watching for signals on a consecutive July hike, which remains a possibility.