BOJ Eyes Rate Hike in September Amid Rising Inflation

The Bank of Japan (BOJ) is reportedly planning to raise interest rates as soon as its September meeting, with some speculating that it may even consider more aggressive hikes thereafter.

According to sources, the BOJ aims to move from its current pace of hiking interest rates roughly twice a year to a faster one. This comes as underlying inflation approaches the 2% target, prompting the central bank to be more sensitive to upside risks to prices.

Market pricing currently sees the odds of a rate hike in September at around 61%, with traders expecting at least one more rate hike before the end of the year.

However, some analysts are skeptical about the BOJ's ability to move quickly on rates, citing its history of being 'timid' and preferring to wait for more data to justify its decisions.