BoJ's Ueda Signals 1% June Rate, Markets Price 80% Odds as Yen Stays Above 160
Updated
Updated · IG International · Jun 7
BoJ's Ueda Signals 1% June Rate, Markets Price 80% Odds as Yen Stays Above 160
2 articles · Updated · IG International · Jun 7
Summary
Markets now assign about an 80% chance that the Bank of Japan will raise rates to 1% in June after Governor Kazuo Ueda warned it may no longer look through war-driven inflation.
Ueda's shift centered on second-round inflation risks, marking a break from the BoJ's earlier ambiguity over supply shocks and reinforcing expectations of further policy tightening.
Japan's May foreign reserves fell a record US$75.5 billion to US$1.09 trillion after roughly ¥11.7 trillion in yen-buying intervention, yet USD/JPY still rose 0.7% and moved back above 160.
That response suggests intervention alone is failing to reverse yen weakness; analysts say only a credible path of sustained BoJ tightening, not a single hike, can challenge the dollar's uptrend.