According to informed sources, officials at the Bank of Japan are poised to consider a 0.25 percentage point increase in the benchmark interest rate this month and believe there is a possibility of implementing one further rate hike later this year.

The sources indicate that the Bank of Japan may deliberate on raising the policy rate to 1% at its policy meeting concluding on June 16. Officials also hold the view that, given that real interest rates remain low and inflation continues to face upside risks, there remains room for additional rate increases in the future.

Due to the highly uncertain situation in the Middle East, officials will gather as much data and information as possible up until the last moment before making a final decision. They stated that there may be some dissenting voices against the rate hike, but these are unlikely to be sufficient to sway the ultimate decision.