BOJ Scheduling Quirk Sets Stage for Rate Hike Showdown

The Bank of Japan has scheduled its next year's July policy meeting on the 21st and 22nd, which could prove crucial for determining how high Japanese interest rates may ultimately rise.

This quirk in scheduling would allow hawkish board members Naoki Tamura and Hajime Takata to cast their votes before their five-year terms expire on July 23rd. This has drawn attention because it preserves the BOJ's ability to deliver a rate hike before a board reshuffle that could make future tightening harder.

Sources have told Reuters that the BOJ is set to raise rates as soon as September and is considering hiking more aggressively thereafter to avoid falling behind the inflation curve. The central bank has hiked rates at a pace of roughly twice a year, but would need to lift its current 1% policy rate three or four more times to reach a peak near 1.75% or 2%, above earlier expectations.