A Bloomberg report saying that the BOJ is considering a rate hike in September or October has been circulated, and market participants are said to be examining views on the relationship between the BOJ's independence and the government's response.
On 13 August, the US market was reported to have remained broadly subdued, even as rate-hike expectations eased in response to the weakness of the July PPI. Pressure for long-term interest rates to rise did not abate, and views were expressed that the data were unlikely to develop into a disinflation theme.
Against this backdrop, Bloomberg reported that the BOJ is considering a rate hike in September or October, based on interviews with multiple people familiar with the matter. In the market, the prospect of a BOJ rate hike was said to have grown closer amid views that coordinated intervention by Japan and the United States had reached its limits.
One view presented was that the purpose of the BOJ's communications was for its leadership to emphasize the central bank's independence while avoiding a firm commitment to a September rate hike. The article also pointed to an intention to dispel the “barter theory” of coordinated intervention, with the aim said to be maintaining freedom of action while signaling a hawkish stance.
At the same time, the BOJ is said to want to retain some ambiguity so that the market does not fully price in a September rate hike. The challenge is described as determining how to maintain its independence and policy flexibility while responding to the large number of simultaneous equations it faces.