Goldman Sachs: The Bank of Japan may maintain the policy interest rate unchanged in June, expecting the next rate hike in January 2026.

On June 17, Goldman Sachs expected that the economic activity and price indicators released since the April monetary policy meeting continue to show an strengthening of the domestic virtuous cycle in Japan, but the impact of tariff increases may materialize in the future. From a risk management perspective, in the context of high uncertainty, the Bank of Japan is expected to maintain its policy interest rate unchanged in June while maintaining its gradual rate hike stance.

Goldman Sachs believes that the next policy interest rate hike will be in January 2026. Regarding the Bank of Japan's mid-term assessment of the current Japanese government bond purchase reduction plan (as of March 2026), it is expected that the existing plan will remain unchanged. Thereafter, the Bank of Japan is expected to continue to reduce the scale of purchases over the course of a year, although the pace will be slower, ultimately falling to around 2 trillion yen per month. This is in response to a survey conducted by the Bank of Japan among market participants in advance, and is consistent with the level before the start of QQE.