The Bank of Japan’s May meeting is a key turning point. Makoto Sakurai warns that the window for rate hikes is closing, and Sanae Ozaki is under significant pressure. Meanwhile, the U.S. Treasury Secretary has signaled a willingness to go along—so how will this drama end?

Makoto Sakurai said the Bank of Japan is very likely to raise interest rates next month. If it does not act, it will fall behind the inflation situation. The meeting is crucial; otherwise, it may miss the window for a rate hike and, due to the ongoing high uncertainty stemming from the Iran conflict, the next rate hike may have to be postponed indefinitely. The yen’s level after intervention has lifted, increasing import costs and raising inflation risk. Tokyo’s inflation in May was 1.3%, below expectations, and core inflation could accelerate again within the year. Sanae Takaichi is seen as resistance to a rate hike. After the U.S. Treasury Secretary’s visit, it showed support for further rate hikes, and the central bank will make its own decision.