According to a report by Jinshi Data on July 23, Mitsubishi UFJ analysts said that the yen may fall if the Bank of Japan keeps interest rates unchanged at its meeting on July 31. Japanese politicians are increasingly uneasy about the slow pace of monetary policy normalization.
Lee Hardman, an analyst at the bank, said in a note that a weaker yen and the timing of the Liberal Democratic Party leadership election in September favor a rate hike next week rather than later in the year. The Bank of Japan is expected to raise rates by 15 basis points.
Hardman said that if the Bank of Japan does not raise interest rates next week as expected, the yen is likely to fall quickly back to its recent lows, forcing Japan to intervene again.