Expectations for a September Bank of Japan rate increase have strengthened further, with markets now pricing roughly a 76%-80% probability of a move at the Sept. 17-18 meeting, up sharply from about 24% after the BOJ's July gathering. By October, the implied probability rises to around 96%, underscoring growing conviction that tighter monetary policy, rather than intervention alone, may be needed to stabilize the yen. The BOJ raised its short-term policy rate to 1% on June 16, the highest level since 1995, and then left rates unchanged at its July 30-31 meeting while signaling unease over inflation. Rising energy costs and the yen's persistent weakness have pushed up import prices and nudged Japan's underlying consumer inflation toward or above the central bank's 2% target. The yen was trading around 159.16 per dollar in mid-August after recovering only part of its earlier losses. Late-July and early-August currency intervention involving Japan, the United States and South Korea briefly lifted the yen by about 5%, but much of that move has faded, reinforcing the view that exchange-rate support may not last without a shift in rate expectations. That matters beyond Japan because the country is the world's largest creditor nation and its investors hold trillions of dollars in overseas assets, including U.S. Treasuries and European bonds. Higher Japanese yields could encourage capital to move home, adding pressure to global bond markets, while a stronger yen would also erode the value of overseas earnings for major Japanese exporters such as Toyota and Sony. If the BOJ follows through with a September hike, markets are likely to focus quickly on how fast further increases could come. If it holds instead, the yen could weaken sharply again, potentially reviving pressure for more intervention.