BOJ Sets Stage for Rate Hike with Masu Speech and News Conference

The Bank of Japan (BOJ) has scheduled another speaking event ahead of its next policy meeting in September, which could provide hints about whether the central bank will raise interest rates that month. Board member Kazuyuki Masu will deliver a speech and hold a news conference on September 10, adding to two existing similar events featuring hawkish board members Hajime Takata and Ryozo Himino. This move is seen as a repeat of past practices where the BOJ gave advance signals of rate hikes in speeches delivered by executives before policy meetings.

Takata dissented on the BOJ's decision in July to keep rates steady, calling for a hike to 1.25%. Masu and Himino are among the hawks in the nine-member board who favor a near-term rate hike. The BOJ ended its decade-long stimulus programme in 2024 and has since raised interest rates several times, including in June when it took its policy rate to a 31-year high of 1%.

Last week's joint Japan-U.S. yen intervention and comments from U.S. Treasury Secretary Scott Bessent signaling his desire for an early rate hike have all but locked the BOJ into raising rates in September, according to sources. With domestic producer prices spiking and expected to continue rising, there's a strong chance the BOJ will raise rates in September, said Mari Iwashita, executive rates strategist at Nomura Securities.