BOJ seen hiking to 1.25pct in September as yen weakness accelerates timeline
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bearish | 1.1140 |
ABN AMRO | Bullish | 1.1500 |
Bank of America | Bullish | 1.1500 |
From the original
The sharp shift in economist expectations points to a BOJ that is now genuinely behind the curve on tightening, with the terminal rate view moving higher and the timeline compressing in the space of a single month. For yen crosses, this raises the stakes around the September meet
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BOJ seen hiking to 1.25% in September as Japan inflation pressures broaden
Bank of Japan preview: 25bp hike incoming
The desk anticipates a 25 basis point rate hike by the Bank of Japan (BoJ) during its upcoming meeting on September 18, 2026, aligning with market expectations for aggressive policy tightening. This view is supported by significant increases in money market rates, with one-month JPY OIS rates rising 50 basis points since July, indicating heightened expectations for further hikes. Notably, local data, such as 2.4% growth in real cash earnings, also backs the notion of pressure on the BoJ to adjust rates to aid currency stabilization. The upcoming BoJ meeting is pivotal; a failure to deliver on expected tightening could lead to negative sentiment towards the yen, particularly affecting the USD/JPY pair, given its sensitivity to BoJ policy shifts (Per the full note [source]).
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