A Pre-Meeting Ahead of the Monetary Policy Meeting on 27 August? | Fujishiro Koichi (藤代 宏一) | 第一ライフ資産運用経済研究所

There has been speculation that Deputy Governor Himino (氷見野)'s speech scheduled for 27 August could serve as a pre-meeting ahead of the Bank of Japan's monetary policy meeting, strengthening expectations of a rate hike at the September meeting. Market participants are watching for the impact on long-term interest rates and the foreign exchange market if the Bank signals a rate hike at the meeting.

Some believe that the probability of a rate hike at the 17–18 September meeting has risen to around 88%. Conversely, there are also views that a negative message from the Bank would trigger a rise in long-term interest rates and a weaker yen.

It has been reported that, ahead of the rate hike in December 2025, Governor Ueda (植田) was gathering information on wage increases in preparation for the next monetary policy meeting, and the upcoming speech could likewise serve as an occasion to signal policy intentions. The latest rate hike, in June 2026, was already heavily priced into the market, and there were reportedly no clear hints from the Bank of Japan.

The strengthening of companies' pricing behavior is cited as a theoretical justification for a rate hike, while the corporate goods price index remained elevated year on year in July. The corporate services price index for July is also expected to show strong growth, raising concerns about pass-through to consumer prices.

Rising prices for AI-related goods are also cited as a justification for a rate hike, with some believing that increased demand for AI-related materials and components could intensify upward pressure on prices. Although deteriorating terms of trade caused by the situation in the Middle East has affected some manufacturers, companies benefiting from strong AI demand are reportedly performing well.