BOJ Signals More Rate Hikes Amid Inflation Pressures Build

The Bank of Japan (BOJ) is set to keep interest rates steady at 1% on Friday, but signal potential for further hikes as inflationary pressures build.

The central bank faces a delicate balance between talking down the yen bears through hawkish communication and not antagonizing a government seen as critical of policy tightening.

Analysts expect Governor Kazuo Ueda to maintain the BOJ's view that risks to the price outlook are skewed to the upside, with some predicting the next rate increase could come in December or even earlier if inflation overshoots or yen falls continue.