BoJ Rate Hike Odds Hit 80%, Fears of Weaker Yen Linger

Tokyo's markets are pricing in an almost certain interest rate hike from the Bank of Japan (BoJ) by September 18, according to a former BoJ board member. Traders have assigned a roughly 80% probability of a rate increase on that day.

The weak yen has yet to improve despite US-Japan coordinated intervention, and holding rates steady could reignite a sell-off of the currency. This would raise inflation risks due to costly imports, said Seiji Adachi, who served on the board until March 2025.