The BOJ left interest rates unchanged at its July Monetary Policy Meeting, but at the same time hinted at a September rate hike in its Outlook Report and press conference. The coordinated Japan-US intervention at the end of July was aimed at containing long-term interest rates, while attention is now focused on developments at the Fed and in Jackson Hole.
Although the Bank of Japan left interest rates unchanged at its July Monetary Policy Meeting, the Outlook Report released at the same time and Governor Ueda (植田)'s press conference are being interpreted as laying the groundwork for the next rate hike. The Outlook Report's main view identified the risk of inflation exceeding 2% on the upside as significant and indicated a stance of deepening the discussion at the next and subsequent policy meetings. This is being viewed as communication aimed at a September rate hike. Attention is also focused on when the next meeting will be held.
In addition, a coordinated Japan-US intervention was carried out on 31 July, signaling efforts to curb yen depreciation and stabilize long-term interest rates. A statement by the finance minister set out a policy of addressing excessive yen weakness and disorderly market movements, while also suggesting the possibility of further coordinated intervention. Treasury Secretary Bessent (ベッセント) is wary of rising long-term interest rates against the backdrop of the BOJ's slow pace of rate hikes, and the US government's intervention stance has become a factor linking monetary developments in Japan and the United States.
In the United States, meanwhile, the yield curve steepened after the Fed's July FOMC, and expectations grew that the probability of a September rate hike would increase. Market participants moved to price in a September rate hike, and a subsequent September rate hike by the BOJ is being seen as the natural next step. Attention is also focused on domestic corporate goods prices on 13 August and developments at the Jackson Hole meeting at the end of August.