12/06/2026
On Thursday, news of Bank of Japan Governor Kazuo Ueda's hospitalization became the focus of the market. Ueda is expected to receive treatment in the hospital for about two weeks and will miss the June 15-16 monetary policy meeting, which will be chaired by Deputy Governor Ryozo Himino, with Deputy Governor Shinichi Uchida handling the post-meeting press conference. This unexpected situation adds uncertainty to the upcoming interest rate decision and highlights the sensitivity of the current policy path. Despite the governor's absence, the mainstream market view still expects the Bank of Japan to potentially raise the policy rate from 0.75% to 1.0%, a 31-year high. Continued pressure on energy prices due to the Middle East situation is pushing up inflation risks, and the Bank of Japan is increasingly concerned about the upside risks to prices. The Japanese government bond market initially weakened before stabilizing today. The 10-year yield touched 2.695%, and while the 30-year bond auction saw a widening gap at the end, the longer-term yields showed resilience, with futures prices recovering to around 128.77 at the close. This performance of Japanese bonds is directly linked to expectations of interest rate hikes, significantly impacting the yen exchange rate.
