Economists polled by Reuters now expect the Bank of Japan to raise rates next month amid yen weakness and shifting policy expectations.
A Reuters poll shows 57% of economists now forecast the Bank of Japan will lift its benchmark rate to 1.25% in September, up from just 5% in July. The shift reflects growing concerns over yen depreciation and a perceived delay in tightening by the central bank.
Expectations for the terminal rate have also risen, with a slim majority projecting it will reach at least 1.50% by early 2027. Last month’s coordinated currency intervention was deemed largely ineffective, leaving the yen exposed to further selling pressure.
Traders view the September decision as a binary risk for JPY pairs, with a hike seen as less supportive for the yen than a surprise hold would be damaging.