BOJ Set for Second Rate Hike This Year Amid Rising Japanese Inflation

The Bank of Japan (BOJ) is preparing to raise interest rates by 25 basis points next week, according to Reuters sources. This move would be the central bank's second hike this year, following a similar increase in June.

The rate hike aims to combat rising inflation in Japan, which has been steadily increasing over recent months. Core inflation is nearing the BOJ's target of 2% per annum, while overall prices accelerated sharply in August to a three-and-a-half-year high.

BOJ Governor Kazuo Ueda had signaled that rate hikes would be discussed during the central bank's September meeting, particularly given growing signs of sticky inflation. However, there is no clear consensus within the BOJ on just how much rates should rise and at what pace.