BoJ seen leaving policy rate on hold, but will it signal possible restart to rate hikes?
Key points
- We expect BoJ will leave policy rate on hold when it meets next week, with uncertainty (including ultimate impact of tariffs) still high despite relief over US-Japan tariff agreement
- We see Bank raising core CPI inflation forecast for FY25; focus is on whether it upgrades assessment of balance of risks to its outlook
- One hurdle for rate hike (tariff rate) has been cleared; remaining obstacles include ultimate impact of tariffs and domestic political outlook
