Bank of Japan Governor Kazuo Ueda is in the hospital with an infected liver cyst. Japan’s Finance Minister Satsuki Katayama wants everyone to know: the show goes on.
Katayama confirmed that the BOJ’s monetary policy meeting, scheduled for June 15-16, will proceed as planned despite Ueda’s absence. Deputy Governor Ryozo Himino will chair the session, while fellow Deputy Governor Shinichi Uchida will handle the post-meeting press conference.
This is the first time a BOJ governor has missed a policy meeting since the current framework was established in 1998. And the timing couldn’t be more loaded, given that markets had been pricing in a potential quarter-point rate hike that would push Japan’s benchmark rate to 1%.
What happened and why it matters
Ueda was hospitalized on June 10 for treatment of an infected liver cyst. He’s expected to recover in time for the next scheduled BOJ meeting on July 30-31.
Since taking the helm in April 2023, Ueda has been the architect of Japan’s gradual exit from ultra-loose monetary policy. The landmark moment came in March 2024, when the BOJ ended its negative interest rate regime.
The yen and the crypto connection
The yen weakened following news of Ueda’s hospitalization. A weaker yen typically signals that investors are discounting the likelihood of near-term tightening.
For crypto markets, this dynamic creates an interesting setup. A delay in Japanese rate hikes, or even the perception of one, tends to support risk-on sentiment globally because of the yen carry trade, where investors borrow in low-yielding yen to fund positions in higher-returning assets.
The March 2024 rate hike, while widely anticipated, still sent ripples through crypto markets as traders recalibrated their carry trade exposure.
What this means for investors
There’s a reasonable case that the BOJ simply holds rates steady in June and defers any major decision to the July 30-31 meeting, when Ueda is expected to return. That would effectively push the rate hike timeline back by six weeks.
For crypto investors specifically, three things are worth watching. First, any formal statement from the BOJ about forward guidance during the June meeting. Second, the yen’s trajectory in the days following the meeting. Third, Ueda’s health updates, as his planned return for the July meeting matters enormously.