BOJ Expected to Hold Rates as Yen Hits 40-Year Low

The Bank of Japan (BOJ) is expected to keep its policy rate at 1% at its July 30-31 meeting, but may sound more concerned about inflation. A weak yen and higher energy costs are putting pressure on prices.

The BOJ only just raised rates in June, so this meeting is less about an immediate move and more about steering expectations. Investors will watch the quarterly outlook report and Governor Kazuo Ueda's press conference for hints on how soon another hike could come.

The yen recently hit a 40-year low versus the dollar, making imports like fuel and food more expensive and keeping inflation sticky. Reuters' poll of analysts points to 1.25% by end-December, with some seeing a move as soon as October.