Former Bank of Japan (BOJ) chief economist Seisaku Kameda said on Monday that a U.S.-Iran peace agreement is not expected to change the BOJ’s outlook of raising interest rates twice this year. According to Odaily, the BOJ is expected on Tuesday to lift its short-term policy rate to 1% from 0.75% as inflation pressures intensify.
Kameda said the rate hike would have likely taken place in April if the Middle East war had not broken out. He added that if the peace agreement leads to a smooth reopening of the Strait of Hormuz, it could ease some pressure for the BOJ to raise rates faster than expected to curb inflation.
However, Kameda said this would not alter the BOJ’s plan to normalize monetary policy by raising rates about twice a year to push up still-low real borrowing costs. He said that after a June rate hike, the BOJ is likely to raise rates again in October or December.
Separately, BOJ Governor Kazuo Ueda will miss the June meeting due to hospital treatment for an infectious hepatic cyst. Deputy Governor Shinichi Uchida will chair the press conference. Kameda said Uchida is expected to reiterate the BOJ’s determination to continue raising rates, while avoiding clear signals on the timing of the next hike due to ongoing uncertainty in the Middle East.
Former BOJ Chief Economist Kameda Expects Two Rate Hikes in 2025 Despite U.S.-Iran Peace Deal
2026-06-15 04:02:06
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