KEY TAKEAWAYS
- The Bank of Japan (BOJ) did not deliver a surprise rate hike, but Governor Ueda Kazuo sent a strong message that the bank is worried about the possibility for above-target inflation in the near term, pointing to another hike as early as September.
- Prime Minister Takaichi Sanae’s political difficulties may give the BOJ more space to hike, as the prime minister can ill afford the negative political and market reactions that perceived intervention in monetary policy would bring.