The Bank of Japan’s April 2026 decision to hold the policy rate at 0.75 percent despite a 6-3 split, with three members favoring an immediate 25-basis-point hike, continues to anchor trader expectations for the July meeting. Upward revisions to the fiscal 2026 core inflation forecast to 2.8 percent, driven by energy-price pressures from the Iran conflict, have reinforced gradual normalization views while tempering near-term aggressive moves. A mid-May Reuters poll showing 65 percent of economists expecting a June increase to 1.0 percent supports the current 59 percent market-implied odds of no change in July, as that path would likely leave room for a measured adjustment. Lingering uncertainty over global growth, wage trends, and volatility from the Middle East keeps a 40.5 percent probability attached to a further 25-basis-point rise priced in as a plausible alternative outcome.