Market Highlight 15.06.2026

The Bank of Japan is preparing to raise its policy rate to 1%, the highest level in 31 years. This will be an important test as the BOJ seeks to chart the course of monetary policy in a highly volatile environment marked by rising energy prices, a continued weakening of the JPY, and growing political pressure. Although the inflation rationale for monetary tightening is clear, the decision carries the risk of slowing economic growth and restraining investment at a time when Japan’s economy is only gradually recovering. The move would help ease pressure on the JPY, whose weakness has raised import costs and increased the burden on both corporate budgets and household spending. BOJ Governor Ueda has just been hospitalized and will be absent from this week’s meeting. However, his absence is unlikely to alter the rate decision, as the Board appears to share the same concern over the rapid escalation of price pressures on the Japanese economy.

When President D. Trump meets his counterparts at next week’s G7 summit in France, one of his preferred topics will be on the agenda: the massive U.S trade deficit. The G7 is expected to discuss the U.S current-account deficit and the corresponding surpluses of China, and to a lesser extent those of the European Union and Japan. Current-account deficits contributed to the crises in Latin America in the early 1980s, East and Southeast Asia in the late 1990s, the U.S in 2007 - 2009, and the euro area from 2009 onward.

Domestically, interbank USD/VND fell by around VND 25 last Friday, in line with the weakening of the USD in global markets. The effective daily ceiling stood at 26.412.

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