The Bank of Japan is widely expected to raise its policy rate by 0.25% to 1.25% at its September 17-18 meeting. While there is speculation in the market of a 0.5% hike, the author believes it is unlikely that the BOJ will surprise with a 0.5% move. Subsequent hikes are expected as early as December this year or at the latest January next year, with the scenario of the policy rate eventually ending its hiking cycle at 1.75%. Attention will be on the September 11 corporate goods price index, the September 18 consumer price index, and Governor Ueda's remarks at his Osaka speech.
BOJ expected to hike rates, pushing yields up
