BoJ on Hold: Will Hawkish Guidance Boost the Yen?

The Bank of Japan is widely expected to maintain its policy rate at 1.00% on Friday, following a 25bp rate hike in June.

Policymakers will focus on Governor Kazuo Ueda's guidance and the quarterly Outlook Report, which could provide clues about the timing of the next rate hike.

A broadly balanced message from the BoJ would suggest policy continuity rather than a hawkish shift, potentially limiting the immediate market reaction.

The BoJ is likely to retain its warning that inflation could overshoot the 2% target, despite recent data showing Japan's core CPI rose to 1.6% year-on-year in June.