The Bank of Japan just hiked its benchmark interest rate to 1%, the highest level since September 1995. And according to one of the most closely watched FX strategists in the world, it might not be enough.
Jane Foley, head of FX strategy at Rabobank, put it plainly: the market isn’t just looking for rate hikes. It’s looking for conviction.
“What the market wants to see is evidence that the Bank of Japan is not behind the curve on inflation.”
The BOJ’s two-day meeting, which concluded on June 16, produced a 7-1 vote to raise the short-term policy rate from 0.75% to 1%. It’s the first increase since December 2025, and it moves Japan further along a normalization path that would have seemed unthinkable just a few years ago.
Why a rate hike can feel like not enough
