BOJ Rate Hike Looms, But Will Yen Respond?

The Bank of Japan is widely expected to raise its policy interest rate to 1.25% at its September 17-18 meeting, a level not seen since April 1995.

Nearly every economist watching Japan has penciled in this move, but they can't agree on whether the yen will actually care.

The data backing a tightening move is hard to argue with: Japan's second-quarter GDP growth was revised up to an annualized 1.4%, real wages climbed 2.4% year-on-year in July (the strongest pace since 2021), and wholesale prices rose 7.6% year-on-year in August.

Polls put the probability of a 25 basis point hike somewhere between 88% and 97%, depending on who's counting.