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The BOJ will probably leave its policy rate unchanged at 1.0% at the September 17-18 meeting, maintaining a tightening bias but likely deferring action to October or December.
The Bank of Japan just raised rates to 1.0% in June and held in July with only one dissent. Governor Ueda has turned more hawkish, warning that underlying inflation could exceed 2% and that delaying action risks an overshoot. However, he framed the next meeting as the start of debate, not a decision point, and surveys of economists place the next hike in October or December rather than September. The board also lowered its near-term inflation forecast, giving it room to wait. With the meeting scheduled for September 17-18, the probable outcome is a hold at 1.0%, preserving the tightening bias for a later move. A September hike is genuinely possible if private board dynamics have shifted further than the public record shows.
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