Economists: US-Iran Peace Deal Won't Alter BOJ's Path of Two Rate Hikes This Year
Alina Collins
Former BOJ chief economist Seisaku Kameda says the BOJ will raise rates to 1% on June 16 — a 31-year high — and the US-Iran peace deal, while easing oil-price pressure, won't change the bank's pace of roughly two hikes a year.
Why was this hike delayed by two months?
The BOJ originally planned to hike in April but postponed after the Middle East conflict escalated. The new date is June 16.
The move will lift the short-term policy rate from 0.75% to 1%, the highest in 31 years.
This means → geopolitical risk shifted the timetable, not the destination — the BOJ's direction never wavered.
What does the peace deal change for the BOJ's path?
Kameda argues that if the deal reopens the Strait of Hormuz — a chokepoint handling roughly a fifth of global oil shipments — oil-price pressure will ease.
Lower oil prices mean the BOJ won't need to hike faster to curb inflation, but it won't slow down either.
In plain terms = cheaper oil is welcome, but the BOJ isn't hiking to fight oil prices — it's pushing real borrowing costs that have stayed too low back toward normal.
When is the next hike?
After June, the next window is October or December. The BOJ also meets in July and September.
A Reuters poll shows economists broadly expect a further hike to 1.25% in Q4.
This means → the "roughly two hikes a year" rhythm holds — one per half, a clear path.
With Ueda absent, what signal will Uchida send?
Governor Kazuo Ueda is hospitalized with a liver-cyst infection and will miss the meeting. Deputy Governor Shinichi Uchida will chair the post-meeting press conference.
Kameda expects Uchida to reaffirm the hiking stance but give no precise timing for the next move.
In plain terms = Uchida's style is "constructive ambiguity" — he'll confirm the direction, not the date.
What should markets watch next?
The key variable is how fast the energy shock actually fades once the Strait of Hormuz reopens.
If oil prices fall faster than expected, the BOJ faces less resistance to its set pace; if not, the timetable may shift again.
This reflects a recalibration the market needs after Uchida's presser — not about the direction of hikes, but about how well the hiking rhythm matches the oil-price path.
Content is for reference only, not financial advice.