BOJ Set to Hike Rates Amid Inflation Pressure

The Bank of Japan is expected to raise its short-term policy rate by 25 basis points to 1.25% at its September 16-17 meeting.

This decision comes as Japan's headline inflation remains elevated, with a July reading of 1.9%, partly due to higher energy costs. Around 89% of economists surveyed by CNBC expect the BOJ to raise rates in response to inflation and wage growth pressures.

The Fed's upcoming monetary policy announcement is also being closely watched, as changes in US interest rates can affect Japan indirectly through the difference between US and Japanese borrowing costs.