Shusuke Yamada, FX and rates strategist at BOFA GLOBAL RESEARCH, said a hawkish rate increase by the Bank of Japan at next week’s meeting would support the yen. He said markets have largely priced in a hike; current pricing implies about a 50% chance of a follow-up move at the October meeting. If the market raises the October-hike probability above 60% and prices a >50% chance of another hike in March next year, the move would likely be interpreted as a sustained hawkish shift. Market attention

Shusuke Yamada, FX and rates strategist at BOFA GLOBAL RESEARCH, said a hawkish rate increase by the Bank of Japan at next week’s meeting would support the yen. He said markets have largely priced in a hike; current pricing implies about a 50% chance of a follow-up move at the October meeting. If the market raises the October-hike probability above 60% and prices a >50% chance of another hike in March next year, the move would likely be interpreted as a sustained hawkish shift. Market attention is on BoJ guidance next week on the future path of policy rates.