Markets Expect BOJ to Raise Rates to Highest Since 1995, Deputy Governor to Attend Press Conference
Alina Collins
BOJ Deputy Governor Uchida Shinichi will chair the post-decision press conference in place of hospitalized Governor Ueda Kazuo, with the benchmark rate set to reach its highest level since 1995; the real suspense is how far Uchida goes in signaling the pace of future hikes.
The governor is hospitalized — who takes the podium?
Ueda Kazuo is in hospital with an infected liver cyst. Deputy Governor Uchida Shinichi will stand in at Tuesday's post-decision press conference.
This is the first time a governor has missed a policy press conference for health reasons since the 1998 Bank of Japan Act took effect.
Ueda is expected to submit views to the board in writing but will not vote. He is expected back before the July meeting.
The hike itself is priced in — so where is the suspense?
Markets have fully priced in this rate increase — the BOJ is expected to lift the benchmark to its highest level since 1995.
This means → the real focus is not *whether* but *how* Uchida signals the future policy path.
Bank of America's rates and FX team noted that USD/JPY has pushed back above 160; the BOJ needs a sufficiently hawkish tone to stem further yen weakness.
What is Uchida's dilemma?
He must sustain expectations of further tightening while respecting Prime Minister Takaichi Sanae's preference for economy-supportive, dovish-leaning monetary policy.
In plain terms = too dovish and the yen keeps falling; too hawkish and he risks a clash with the prime minister's stance.
The BOJ is also expected to announce it will stop tapering bond purchases from next April — another normalization milestone Uchida must explain alongside the rate decision.
Can Uchida handle the communication?
Uchida has been central to BOJ policy design for years, involved in every unconventional tool from negative rates to yield curve control — a framework where the central bank sets a target for long-term rates and buys or sells government bonds to pin rates near that target.
In February 2024 he laid out the exit from massive easing a full month early; the BOJ's subsequent moves tracked his outline almost exactly.
During the summer 2024 global market rout he was the first BOJ official to speak publicly. His line — "we will not hike when financial markets are unstable" — effectively calmed the panic.
What signal is the market watching for?
Some economists expect a stand-in deputy governor to stick closely to Ueda's existing messaging.
Daiwa Institute chief economist Kanda Keiji expects Uchida to draw on deep policy experience and give a detailed account of the normalization path.
This reflects a single verification question for markets: will Uchida relay the nine-member board's collective stance, or send a more personal forward signal — and that answer will reprice expectations for the pace of further hikes.
Content is for reference only, not financial advice.