WS #6127

The dominant signal in this window is the Bank of Japan's (BOJ) decision to hold rates steady at 0.75% while sharply revising its inflation forecasts upward due to the Iran war and elevated oil prices. The BOJ's quarterly report highlights significant upside risks to inflation and downside risks to growth, with a split 6-3 vote revealing three board members proposed a hike to 1.0%. This is a clear signal that Japan is facing stagflationary pressures from the Middle East conflict, which could weigh on global risk sentiment and support the yen. Separately, OpenAI missed revenue and user targets, with the CFO warning of cash flow problems if growth slows—a bearish signal for the AI sector and related tech stocks. Meta is preparing to undo its Manus acquisition after China blocked it, adding to regulatory headwinds for big tech. Oil prices continue to climb towards $110 as US-Iran peace talks stall, with the Strait of Hormuz disruption persisting. The narrative arc for the Iran conflict is STABLE with no de-escalation, as the US rejects Iran's proposal to reopen the strait under Iranian terms. The BOJ's hawkish hold and inflation revision is the most significant new development, as it directly links the Iran war to tighter monetary policy in a major economy.