Bank of Japan Expected to Raise Rates to 1.25%, Highest Since 1995

The dissent watch is the real signal here: if the two Takaichi-appointed members break ranks, it would suggest political pressure is building around the pace of normalization rather than the direction. Ueda's framing of the terminal rate matters more than the hike itself, since it sets expectations for how far the BOJ is willing to go. The unusual mix of drivers cited — energy costs tied to the Iran war alongside strong AI demand — points to inflation the BOJ cannot fully control, which complicates any commitment to a clear path. Whether the board's cohesion holds is the open question.