The Bank of Japan is scheduled to hold a monetary policy meeting on the 17th and make a final decision by the 18th, with expectations that it will raise the policy rate by around 0.25% to approximately 1.25%. Market participants are increasingly expecting the Japan-US interest-rate gap not to narrow, raising the possibility that the yen's decline and the dollar's rise will continue.
The Bank of Japan is expected to hold a monetary policy meeting on 17 September and make a final decision during the meeting, which runs through 18 September. The policy rate is consequently expected to be raised by around 0.25% to approximately 1.25%. With the yen weakening and the dollar strengthening, the BOJ faces a difficult decision over how to set out its future rate-hike policy.
Some market participants say the BOJ could opt for a 0.5% rate hike at its September meeting. Remarks by BOJ Policy Board member Takata Hajime (高田創) have prompted growing expectations that the bank could take action beyond the conventional framework of a 0.25% increase.
The Fed's remarks signaling a rate-hike path have also strengthened expectations that the Japan-US interest-rate gap will not narrow. Market participants are considering the possibility of a larger rate hike and rate increases at two consecutive meetings.
However, some within the BOJ take a cautious view of these expectations, and the decision is considered fluid depending on the remarks of officials and the data going forward. This is a paid article; please refer to the full article for details.)
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