UK Wage Growth Slows as BoE Rate Decision Looms 
JPMorgan Sees ECB Raising Rates to 2.75% in December 
Bank of England Sees Surge in Higher-Risk Collateral 
Australia GDP Beats Forecast, Boosting RBA Rate Hike Bets 
China Boosts Gold Reserves by 650,000 Ounces as Prices Rally 
BOJ Set to Raise Rates to 1.25% as Inflation Risks Build 
Yen Extends Gains as BOJ Rate Hike Bets Rise 
Asian Bank Stocks Slide as BofA Warning and Rising Yields Hit Sentiment 
Gold Rebounds Above $4,300 Despite Hawkish Fed Rate Hike 
Bank of Korea Raises Rates to 3% as Inflation Stays Sticky 
Asian Stocks Steady as AI Shares Rebound Ahead of Fed Decision 
Gold Prices Slip as Fed Rate Hike Looms, Treasury Yields Rise 
Add as a preferred source on Google
The Bank of Japan is widely expected to raise interest rates by 25 basis points on September 18, as policymakers confront persistent inflation and prolonged weakness in the Japanese yen.
The anticipated BOJ rate hike would lift the benchmark interest rate to 1.25%, its highest level since 1993. It would mark the central bank’s sixth increase since abandoning its ultra-loose monetary policy in 2024 and its second rate hike of 2026.
Expectations for tighter monetary policy have strengthened as Japanese inflation remains elevated. Higher oil and gas prices linked to the Iran conflict have added to price pressures, although government fuel subsidies have limited the impact on consumer inflation. Japan’s producer price inflation nevertheless accelerated to a three-and-a-half-year high in August, raising concerns that higher business costs could eventually feed into consumer prices.
Resilient wage growth may also give companies greater scope to pass rising costs on to households, keeping inflation risks on the BOJ’s radar.
Pressure to tighten policy has also increased following unprecedented joint currency-market intervention by Japan and the United States to support the yen. U.S. Treasury Secretary Scott Bessent subsequently indicated that he expected the BOJ to raise rates more quickly to help stabilize the currency.
BOJ Governor Kazuo Ueda has said policymakers will discuss rate increases at the September meeting. With a 25-basis-point hike largely priced in, markets will focus closely on Ueda’s post-meeting comments for signals about the pace of future monetary policy normalization.
A hawkish BOJ outlook could strengthen the yen and push USD/JPY lower. The pair was recently trading around 155.73, while persistent yen weakness remains a contributor to imported inflation.
Japanese equities could face pressure from higher borrowing costs and tighter liquidity. Technology stocks may be particularly sensitive to rising rates after helping drive the Nikkei 225 higher this year. The benchmark index has gained about 24% in 2026, although it remains below its June record highs.
Rising Japanese government bond yields and concerns about fiscal policy under Prime Minister Sanae Takaichi add further complexity as the BOJ weighs inflation risks against economic growth.
