The Bank of Japan (BOJ) is leaning toward raising its benchmark interest rate by 25 basis points at its September meeting, according to people familiar with the matter, as policymakers seek to address rising inflation risks.
The sources said BOJ officials will discuss the possibility of a rate hike, with the board continuing to view inflation risks as tilted to the upside. Rising service prices and the persistently weak yen have further bolstered the case for action. The economy is generally developing in line with the BOJ's previous forecasts, and there have been no major changes that would require a significant policy adjustment, the sources added.
As a result, a 50-basis-point rate increase is considered unlikely. One source said this has reduced market expectations for a "significant rate hike." The information was first reported by Jinshi.