Japan

The Bank of Japan is widely expected to raise its short-term policy rate from 0.75% to 1% at its June 15–16 policy meeting, with markets pricing in an 80% probability. Governor Kazuo Ueda has acknowledged that surging crude oil prices — linked to the ongoing Middle East conflict — are pushing Japan's core inflation toward 2.5%–3.0% in fiscal 2026, well above the central bank's 2% target and creating what analysts describe as a light stagflation scenario.