Review: BoJ Hikes Rates in June and Maintains a Tightening Bias

In this paper, we discuss:

• The BoJ’s decision to raise interest rates by 25bps to 1.0%, the highest level in more than three decades;
• Why policymakers remain concerned about energy-driven inflation and a weak yen despite easing recession risks;
• How the BoJ is balancing further rate hikes with a cautious approach to balance-sheet normalisation;
• Why markets continue to expect additional monetary tightening as inflation moves toward or above target;
• How the Iran conflict and global energy markets are shaping Japan’s inflation and growth outlook.

Download PDF: BoJ Review – June 2026