Reuters Poll: BoJ Rate Hike on Track for June 2025 Despite Middle East Conflict
A Reuters poll of 45 economists conducted April 10–15, 2025, shows 85% expect the Bank of Japan (BoJ) to raise its short-term policy rate by 10–25 basis points by end-June 2025. Despite ongoing Middle East tensions, respondents cited domestic drivers—sustained core inflation above 2%, strong wage growth from spring “shunto” negotiations (potentially >4%), record corporate profitability, and tightening labor markets—as reasons the BoJ’s normalization path remains intact. Analysts (Morgan Stanley, Nomura) emphasize a domestic wage-price dynamic supporting a cautious, data-dependent exit from ultra-loose policy. Market implications include potential reduced yen carry trades, gradual repatriation of Japanese foreign bond holdings, and shifts in global capital flows and bond markets; economists expect these effects to be gradual rather than disruptive. The consensus points to June 2025 as the likely decision point, with the BoJ proceeding carefully to avoid past mistakes from premature hikes.
Neutral
The poll signals a predictable, data-driven BoJ rate normalization rather than a surprise shock. For crypto markets, higher Japanese rates can reduce yen-funded carry trades and gradually shift global capital back toward Japan, which may reduce liquidity in risk assets including some crypto positions — a modest bearish pressure. However, the anticipated and gradual nature of the move, plus the BoJ’s stated caution, make severe disruption unlikely. Historically, predictable central bank tightening creates short-term volatility (reduced leverage, rebalancing) but not sustained crypto market downturns unless combined with wider global shocks. Short-term effects: increased volatility, potential downward pressure on risk-on assets as carry trade unwinds. Long-term effects: gradual reallocation of capital, marginally higher funding costs for leveraged crypto strategies, and possible reduced arbitrage from yen funding. Overall impact is limited and likely absorbed over time.