Markets await BoJ signals on a potential September rate hike after Tokyo CPI exceeded expectations at 1.9% y/y.
The Bank of Japan is expected to keep rates unchanged today following its recent hike, with markets pricing in near-zero probability of a move. Attention shifts to forward guidance for September, where a 25% chance of a hike is already priced in.
Tokyo’s July CPI excluding fresh food rose 1.9% year-over-year, above the 1.7% forecast, reinforcing inflation pressures. June industrial production also beat estimates at 1.3% month-over-month, while unemployment held steady at 2.5%.
Traders will scrutinize the BoJ’s statement for hints on future policy, particularly amid broader yen volatility and recent intervention discussions by Japanese authorities.