ING: The Japanese economy is showing resilience, increasing the likelihood of a rate hike in June

Golden Ten Data reported on May 21 that ING economist Min Joo Kang stated Japan’s stronger-than-expected exports and steady machinery orders offer support for a Bank of Japan rate hike in June. These data indicate that despite recent energy supply disruptions, Japan’s economy remains resilient. Hawkish comments from Bank of Japan Policy Board member Junko Koide have also heightened expectations of tighter policy. ING expects the Bank of Japan to raise rates by 25 basis points in June, citing strong activity data, stubborn inflationary pressures, and growing disagreement within the policy committee. In addition, following the recent bond market sell-off, the Bank of Japan is expected to slow the pace of reducing Japanese government bond purchases, though long-term Japanese yields may still trend higher.