BOJ officials will have multiple near-term opportunities to either confirm or
temper aggressive market bets on a September rate hike; market pricing implies
roughly an 82% probability. Since the July 2024 hike drew heavy criticism, the
BOJ governor has emphasized stronger communication. Yen moves remain a key
trigger for the bank to signal intent. Daiwa senior economist Kento Minami said
the BOJ may avoid an explicit September commitment and instead stress upside
inflation risks to imply an earlier hike — a tone markets would treat as
endorsement of September. Conversely, repeated emphasis on uncertainty, the need
for more data, or assessing the impact of prior tightening would likely be
interpreted as a signal to keep rates unchanged in September.
