The Bank of Japan (BOJ) is waving a yellow flag, cautioning that inflation might just sprint past its 2% target. On June 19, 2026, Deputy Governor Ryozo Himino put the spotlight on this inflationary risk, echoing growing concerns that have been giving central bankers sleepless nights.
BOJ’s rate hike: A historical move
In a move that harks back to the 1990s—1995 to be precise—the BOJ raised its policy rate to 1% on June 16. The increase of 25 basis points marks the fourth rate hike since the beginning of the tightening phase in March 2024.
The BOJ’s decision was led by Deputy Governor Shinichi Uchida amidst Governor Kazuo Ueda’s medical leave, and was primarily driven by rising energy costs and a weakening yen.
Underlying causes: Energy and expectations
