Bank of Japan weighs June interest rate hike and potential future increases

Japan’s central bank is set to consider a June interest-rate hike and may leave open the possibility of another increase later this year, according to people familiar with the matter. The move would signal that the Bank of Japan is still slowly normalizing policy after years of ultra-low borrowing costs.

According to Bloomberg, BOJ officials are expected to debate a quarter-point increase in the benchmark rate at this month’s policy meeting. The same report says policymakers also see scope for an additional hike later in 2026, depending on inflation and the economy’s performance.