Bank of Japan faces uncertainty as Governor Kazuo Ueda is hospitalized

Bank of Japan Governor Kazuo Ueda has been hospitalized with an infected liver cyst, forcing him to miss what was shaping up to be one of the most consequential monetary policy meetings in years. The June 15-16 gathering, where markets had widely expected a rate hike to 1%, will now be chaired in key aspects by Deputy Governor Shinichi Uchida.

It is the first time a sitting BOJ governor has missed a scheduled policy meeting since 1998.

What happened and what comes next

Ueda, 74, was hospitalized on or around June 9. The BOJ expects him to remain in the hospital for approximately two weeks, which rules out his physical presence at next week’s meeting entirely.

The governor reportedly plans to work remotely during his recovery and intends to attend the subsequent policy meeting scheduled for July 30-31. Ueda had personally signaled in early June that he was ready to discuss rate hikes if inflation risks outweighed growth concerns.

The rate hike everyone was expecting

The BOJ’s current policy rate sits at 0.75%, following a hike in April 2026. Markets had been pricing in a 25 basis point increase at the June meeting, which would push the rate to 1%. Inflation pressures, particularly from energy prices, have remained stubbornly elevated.

Why crypto markets should pay attention

The BOJ’s rate decisions have outsized influence on global liquidity conditions. Japan has been one of the last major economies to maintain extraordinarily low interest rates, making the yen a popular funding currency for carry trades. When the BOJ hikes rates, it strengthens the yen and can trigger unwinding of those trades, pulling liquidity out of risk assets across the board, including crypto.

The last time the BOJ surprised markets with a rate move, in mid-2024, it contributed to a sharp selloff in global risk assets. Bitcoin dropped significantly in the aftermath as carry trade positions were rapidly unwound.

Ueda’s planned return for the July 30-31 meeting provides a natural endpoint for the uncertainty.

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