On August 24, Bank of Japan officials are set to speak multiple times, giving markets a fresh chance to gauge whether a September rate hike is coming. Pricing now puts the odds of a September increase at about 82%. Daiwa Securities senior economist Kento Minami said officials may avoid explicitly confirming a September hike, and instead lean on warnings about upside inflation risks. If they stress uncertainty, the need for more data, or the effects of earlier rate moves, markets could read that as a sign that rates will be left unchanged in September.

Markets are closely watching upcoming public remarks from Bank of Japan officials as expectations for a September rate hike have grown sharper. Current market pricing puts the probability of a move in September at about 82%, making official communication a key near-term driver for rate expectations. Since the Bank of Japan’s July 2024 rate increase drew heavy criticism, Governor Kazuo Ueda has stressed the need for better communication with markets. The yen is also seen as an important channel through which the central bank may signal its policy intentions. Kento Minami, a senior economist at Daiwa Securities, said the BOJ may avoid explicitly stating that its next rate increase will come in September. Instead, officials could hint at the need for earlier tightening by emphasizing upside inflation risks, which the market may read as tacit approval of a September hike. On the other hand, repeated references to uncertainty, the need to monitor incoming data, or the need to assess the impact of the previous rate increase could be interpreted as a sign that the BOJ will leave rates unchanged in September.