Overview
- The yen slipped to roughly ¥156–157 per dollar after the decision as investors saw limited guidance on the pace of tightening, while key long-term yields topped 2% to the highest in about 26 years.
- The central bank cited persistent inflation — with core CPI above 2% for 44 straight months — and expectations for solid shunto wage gains, while also factoring potential effects of high U.S. tariffs.
- Ueda said the mechanism of moderate wage and price increases is likely to hold and noted policy remains data dependent, with rates still below the BOJ’s estimated 1.0%–2.5% neutral range.
- Economists broadly expect another increase to 1.0% in July 2026, with some projecting 1.25% by late 2026, though the ultimate endpoint of the cycle remains debated.
- Analysts warned of strains on small and midsize firms, higher mortgage costs, and rising public debt-service burdens, as Bitcoin showed a muted reaction, hovering near $87,000.