The Bank of Japan is expected to keep interest rates unchanged and may raise its outlook on inflation.

Institutional analysis predicts that the Bank of Japan will keep its benchmark interest rate unchanged on Thursday and raise inflation expectations. After the reduction of some uncertainties in the US-Japan trade agreement, investors are looking for signs of another rate hike this year. The main focus of this meeting will be the extent to which the Bank of Japan signals another rate hike this year, with traders currently estimating a 75% chance of a rate hike before the end of the year. Earlier reports suggested that Bank of Japan officials believe that, with the elimination of a key source of uncertainty in the US-Japan trade agreement, the Bank of Japan may consider another rate hike. However, as the key task of determining the actual impact of tariffs still exists, the Bank of Japan will not consider a sudden rate hike at this time. Nevertheless, the momentum for a potential rate hike by the Bank of Japan is gradually increasing, and the idea of October as the next potential rate hike date is becoming more popular in the market.