Tokyo — Bank of Japan Governor Kazuo Ueda is putting inflation control at the top of his agenda, a clear signal the central bank is preparing to raise interest rates as early as June.
A shift in priorities
For years, the BOJ held inflation below its 2 percent target while keeping borrowing costs ultra-low. Now Ueda is refocusing on price stability. The move suggests the central bank sees enough momentum in the economy to begin normalizing policy—something it hasn't done in nearly two decades.
Preparing for June
Ueda has indicated the next few months will be critical. His recent remarks emphasize the need to manage inflation expectations, which have started to creep higher. A rate hike in June would be the first under his leadership and the first major tightening since the BOJ's negative rate experiment began in 2016.
Investors are watching for any hint of a timeline. The yen has already moved on speculation, and a June move could ripple through global bond markets. But Ueda is careful not to promise anything—he's letting the data guide him. The next policy meeting is set for mid-June, and all eyes will be on the board's statement.
Unfinished business
Even with a hike, the BOJ still has to unwind its massive bond holdings and adjust its yield curve control framework. Ueda has said those decisions will come later. For now, he's focused on one thing: getting inflation under control before it becomes a bigger problem.
