Bank of Japan Governor Kazuo Ueda has been hospitalized and will miss the central bank’s monetary policy meeting scheduled for June 15-16. The announcement, made on June 10, throws a wrench into what was shaping up to be one of the most consequential BOJ gatherings in recent memory.

On June 3, Ueda stated that the BOJ needs to consider raising the policy rate to manage inflation risks. Those risks have been mounting, driven in part by energy price shocks tied to escalating tensions in the Middle East.

Some analysts had forecasted at least two policy rate hikes for 2026, with the June meeting viewed as a prime candidate for the first move.

Ueda has served as BOJ Governor since April 2023 and has overseen the most significant shift in Japanese monetary policy in decades. Under his leadership, the central bank ended its negative interest rate policy in March 2024, a move that had seemed almost unthinkable for years given Japan’s entrenched deflationary mindset.

This isn’t the first health scare to hit BOJ leadership recently. Deputy Governor Shinichi Uchida was hospitalized for leukemia treatment in November 2025, creating an earlier period of uncertainty about the central bank’s operational continuity.

The BOJ has spent years trying to navigate a gradual exit from ultra-loose monetary policy while achieving a sustainable 2% inflation target. Japan’s struggle with yen depreciation has added another layer of complexity. A weaker yen pushes import costs higher, fueling the very inflation the BOJ is trying to manage.

If the BOJ punts on a rate hike due to Ueda’s absence, the carry trade stays attractive, and capital continues flowing toward riskier assets. Markets had been pricing in a more hawkish BOJ for 2026. If leadership instability causes the central bank to delay rate increases, it could extend the global low-rate environment that has historically been favorable for risk assets, including crypto.