JPY: BoJ holds but signals summer hike – Danske Bank

The Bank of Japan held its policy rate at 0.75% at its April 27-28 meeting, but the decision was widely read as a hawkish hold that strengthened expectations for another hike this summer.

The vote split 6-3, with three board members dissenting in favor of a move to 1.0%. The BOJ also kept language saying it will continue to raise the policy interest rate, while its April Outlook Report lifted the fiscal 2026 core CPI forecast to 2.8% from 1.9%.

At the same time, the central bank lowered its fiscal 2026 real GDP growth forecast to 0.5% from 1.0%, underscoring a mixed backdrop of stronger inflation and weaker growth. Reuters and other outlets said the decision pushed the yen firmer as traders increased odds of a June or summer hike.

Danske Bank’s view, reflected in FXStreet’s market note, was that the BOJ’s hold still points toward more tightening ahead. The immediate market question is whether Governor Ueda’s comments and the BOJ’s next signals keep June in play or leave summer as the more likely timing.