The Bank of Japan signaled that further interest-rate increases remain likely if economic conditions and underlying inflation move in line with forecasts, widening a policy divergence with the Bank of Korea. Deputy Governor Ryozo Himino echoed Governor Kazuo Ueda’s hawkish remarks and said the BOJ would continue adjusting policy if underlying inflation approaches its 2% target. The BOJ’s data-dependent stance reflects Japan’s recovery from prolonged deflation, with wage growth, inflation and economic activity remaining key indicators. The Bank of Korea, by contrast, indicated that it would continue raising rates at a slower pace as it balances inflation control with economic growth, household debt and financial stability. The differing approaches could affect the yen, won, regional capital flows and Asian currency volatility. The won had previously gained about 0.6% after the BOK raised its policy rate by 25 basis points to 3.75%, its first increase in nearly a year, while also raising its inflation forecast and citing financial-stability concerns. Broader regional markets remain sensitive to the US dollar and Federal Reserve policy, with hawkish signals from the Fed potentially encouraging capital outflows from emerging markets. Investors will focus on upcoming central-bank meetings, economic data and policy communications for clues on the pace of normalization across Asia.