Royal Bank of Canada Supports Expectations for September Rate Hike in Japan

The trend of prices in Japan is rekindling expectations for a rate hike by the Bank of Japan in September. A representative from the Royal Bank of Canada stated that the Japanese price indicators support the expectation of a rate hike by the Bank of Japan in September. The Bank of Japan expressed a more hawkish stance on prices during its July meeting, and the market anticipates a 20 basis point hike in September. Abbas Keshvani, head of Asia macro strategy at the Royal Bank of Canada, mentioned that the Japanese price indicators support the Bank of Japan's rate hike in September. He explained that the statements from the Bank of Japan during the July meeting align with the market's expectations for a hike in September. Keshvani warned that if the Bank of Japan disappoints the market, the yen could weaken further. The remarks from the Bank of Japan during the July meeting are interpreted as a signal that its stance on price response has become stronger than before, and if price pressures persist, the weakness of the yen and the burden of import prices could influence monetary policy decisions. The Royal Bank of Canada assessed that the expectations for a rate hike by the Bank of Japan in September are being maintained based on this trend. The Bank of Japan is scheduled to hold its monetary policy decision meeting on September 17-18.

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