The latest central bank meeting minutes have just been released, and Japan has sent a clear signal: whether to raise interest rates is no longer a question of whether, but how quickly.

Looking at the numbers themselves, the policy interest rate has risen to 0.75%, a new high in nearly 30 years. But this surface phenomenon is actually misleading. What the Bank of Japan truly focuses on is the real interest rate—that is, the nominal rate minus inflation. Based on current inflation levels, Japan's real interest rate remains at the bottom globally. The minutes repeatedly emphasize this point, implying in essence: Japan has not yet exited its easing cycle; at most, it has just stepped out the door.

A key change emerged in this meeting: the stance of policymakers has begun to fracture.

The hawkish faction is noticeably more aggressive. They oppose the snail-paced approach of "raising once a year," advocating for steps every few months. It’s not about sharply increasing rates all at once, but about recognizing that long-term inaction is also not viable. This directly challenges previous market expectations—that the pace is "extremely slow." Now, it seems this pricing no longer keeps up with the policy discussion itself.

There are also dissenting voices. The dovish camp emphasizes risk control, arguing that Japan should not only focus on domestic inflation but also consider the global financial environment, especially the Federal Reserve’s moves. They worry that unilateral tightening by Japan could cause a disconnect with the global economic cycle. But it’s important to note—doves are discussing the pace, while the fundamental direction has long been set: continue to raise rates.

The logic behind the minutes is quite straightforward: a weaker yen combined with rising long-term bond yields indicates that the problem isn’t market sentiment swings, but that real interest rates are being pushed too low. If delays continue, inflation expectations will become harder to control, and long-term bond yields may "spiral out of control," forcing the central bank into a passive stance.

According to mainstream forecasts: the next rate hike could occur in June 2026, with the neutral rate target set between 1.25% and 1.5%, leaving about 75 basis points of room.

The market reaction after the minutes were released was also quite direct: the yen appreciated slightly, Japanese bond yields rose, with the 30-year government bond yield increasing by 1.62% in a single day.

Most importantly, what does this mean—Japan is no longer that country capable of unlimited liquidity supply, always standing on the side of easing. This shift is a major event that will reshape global capital flows and market structures, and it is truly worth paying close attention to.