Bank of Japan’s Summary of Opinions from the April meeting revealed a noticeably more hawkish debate inside the board, with several policymakers arguing that another interest rate hike could come sooner rather than later as the Iran war intensifies inflation pressures. One member explicitly said “it is quite possible the BoJ will raise interest rates from the next meeting onward,” even if uncertainty surrounding the Middle East conflict remains unresolved.
The summary showed increasing concern that the oil shock could accelerate underlying inflation and trigger broader second-round price effects. One policymaker warned that “all scenarios point to further upside risks to prices,” while another argued the BoJ should “raise rates soon barring evident signs of an economic slowdown.” Policymakers also highlighted the risk that supply-side constraints linked to the conflict could generate “extremely strong upward pressure on prices.”
The discussion reinforced expectations that the BoJ is gradually shifting toward another normalization step. One member argued the current policy rate remains far below neutral levels and said the central bank should continue raising rates at intervals of a few months, adding tightening should accelerate “without hesitation” if inflation risks intensify further.
At the April 27–28 meeting, the BoJ left its short-term policy rate unchanged at 0.75%, though three of the nine board members voted in favor of an interest-rate hike, a proposal that was ultimately rejected.
Following the release, Japan’s 10-year government bond yield climbed to a fresh 29-year high as markets increased bets on a possible rate hike at the June 15–16 meeting.
