The Bank of Japan (BoJ) is moving closer to a potential interest rate hike at its September policy meeting, according to Commerzbank analysts. Persistent inflation, especially in services, and an generally positive outlook for wage growth are increasing the central bank’s tolerance for further policy normalization. Markets have gradually priced in a greater chance of an autumn move. A hike would mark another step away from the ultra-loose monetary policy that shaped Japan’s economy for years and could support the yen by narrowing its interest rate differential with major economies, particularly the United States. The currency’s direction would affect Japanese exporters, import costs and the broader economic outlook, while higher borrowing costs could influence mortgages, corporate financing and consumer spending. Investors will also assess the decision alongside policy moves by the Federal Reserve and other major central banks because the timing and scale of BoJ action could affect global capital flows and risk sentiment. The BoJ has not confirmed a timeline. Its next monetary policy meeting is scheduled for September 19-20, 2025, when it will announce a rate decision. The policy rate currently remains at 0% to 0.1%, following the move away from negative rates earlier this year.