The Bank of Japan indicated that it plans to bring forward its July meeting to 21–22 July, leaving room for a rate-hike decision before the terms of hawkish members expire on 23 July.
The Bank of Japan plans to bring forward next July’s meeting to 21–22 July, scheduling it just before the terms of hawkish members Tamura Naoki (田村直樹) and Takada Hajime (高田創) expire on 23 July. This may preserve the possibility for them to participate in a decision on an additional rate hike before their terms end.
The basis for setting the meeting dates has not been explained, but amid mounting inflationary pressure, an increasing number of market participants view the unusual schedule as carrying policy significance, reflecting expectations that the BOJ will accelerate its tightening pace.
Market participants increasingly expect the BOJ to consider accelerating the pace of rate hikes, including a hike in September, and some have pointed to the possibility that the terminal policy rate could reach 1.75–2%. The prevailing view is that a number of additional rate hikes from the current 1% will be needed.
Yen weakness is also being watched as a factor that could accelerate the pace. The yen has at times fallen to around ¥159 to the dollar, drawing market attention alongside developments in foreign-exchange intervention.