Policy intentions of MoF and US Treasury seen offering support for BoJ rate hike
Key points
We expect BoJ to raise policy rate to 1.25% at September meeting; desire of Ministry of Finance and US Treasury Department to curb further weakness in yen seen supporting a hike
We think Bank will again note risk of underlying inflation rising above 2% and indicate its intention to continue tightening
If Governor Ueda says Policy Board will engage in "extensive discussions at upcoming meetings," it could fuel speculation of back-to-back hikes