BOJ Eyes Back-to-Back Rate Hikes Amid US Dollar Pressure

Japan's yen has been weakening in recent months, and expectations are building that the Bank of Japan will raise its policy rate again at its October monetary policy meeting.

This would mark a shift from the yen's slide after the September hike, when markets judged the central bank's message as less hawkish than anticipated.

Kazuo Momma, a former Bank of Japan executive director, believes there is a 20-30% chance that the central bank will raise rates at consecutive policy meetings. He cites the risk of a weaker yen and stronger dollar if the U.S. Federal Reserve raises rates while the BOJ holds or keeps them very low.

The BOJ raised its policy rate to 1.25% in September, but markets have continued to judge that this is not enough, leading to further yen weakness.