According to Jinshi Data, internal discussions at the BOJ indicate that some officials believe December may be an appropriate time for a rate hike, emphasizing that the impact of yen depreciation on inflation remains minimal. This marks a shift from the BOJ's traditionally dovish stance.
Market Response and Yen Movement
Traders have begun factoring in the possibility of a rate hike, resulting in sharp movements in the yen. The USD/JPY pair briefly dipped before regaining ground, reflecting the market's cautious anticipation of BOJ's policy decisions.
Outlook
A potential rate hike could signal a shift in Japan's monetary policy, aligning it more closely with global tightening trends. However, with only a 26% probability priced in, market sentiment remains uncertain, making the BOJ's upcoming meeting a focal point for traders and economists alike.