BOJ Set to Hike Rates to 31-Year High as Markets Eye Ueda's Guidance

The Bank of Japan is expected to raise its policy rate to 1.25% this week, marking the highest borrowing costs in roughly three decades.

This move is largely priced into markets, and investors are now focused on Governor Kazuo Ueda's guidance for future hikes amid yen volatility and US Federal Reserve decisions.

Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, warned that overly aggressive rate increases could force a sudden policy retreat later, potentially triggering a subsequent weakening of the yen.