Yen Strengthens as BOJ Split Vote Signals Possible June Rate Increase

The Bank of Japan (BOJ) kept its benchmark interest rate unchanged at 0.75%, but a 6–3 vote split revealed growing support for tighter monetary policy. Three board members called for an immediate rate increase, marking the largest dissent since Governor Kazuo Ueda assumed leadership.

The central bank also raised its core inflation forecast to 2.8% for the fiscal year while lowering economic growth projections to 0.5% from 1%. Rising global energy prices linked to disruptions near the Strait of Hormuz were cited as a major factor driving inflation concerns.

Yen Strength and Bitcoin Decline Reflect Market Reaction

Market participants quickly priced in a 74% probability of a June rate hike, strengthening the Japanese yen. The USD/JPY pair fell nearly 0.5% to 158.95, reflecting renewed demand for the currency.

Meanwhile, the BTC/JPY pair dropped 0.6% to 12.28 million yen, highlighting continued pressure on digital assets. Analysts note that sustained yen strength could trigger risk aversion, especially if expectations of tighter policy continue to build in the coming months.