The market expects the Bank of Japan to raise interest rates by 25 basis points this week, possibly marking the fastest hike in the current cycle.

(1) According to The Wall Street Journal, the market widely expects the Bank of Japan to raise interest rates by another 25 basis points this week, marking the fastest rate hike in its current cycle. (2) The market has almost fully priced in the possibility of a rate hike by the Bank of Japan at this meeting. Previously, the Federal Reserve is set to make a decision that may implement the first policy tightening in more than three years. (3) With soaring energy prices, yen volatility, rising bond yields, and implicit policy pressure from the United States, the Bank of Japan's tone and guidance will be closely watched to find clues on whether it will further accelerate tightening or stick to a gradual approach. (4) Traders also consider remarks from Bank of Japan officials and comments from Besant as having locked in the outcome for September. (5) Some even believe there is a significant probability of a larger-than-usual rate hike. (6) According to informed sources, Japan's underlying inflation rate is close to 2%, which gives Bank of Japan policymakers a greater sense of urgency to curb price pressures compared to when the baseline trend is weaker.