Sources said the Bank of Japan favors a 25bp policy-rate increase this month to
counter upside inflation risks and will keep the pace of further hikes flexible
depending on economic and price developments. Officials plan to discuss raising
the rate and continue to view inflation risks as skewed to the upside; rising
services prices and a persistently weak yen strengthen the case for action.
Sources said current economic developments broadly match BOJ projections and
that a 50bp move is unlikely, reducing market odds of a large hike.
