The Bank of Japan adjusts its communication method to prepare the market for a possible rate hike as early as December.

According to a report by Jin10, sources reveal that the Bank of Japan is preparing the market for a possible interest rate hike as early as next month. With concerns over the sharp depreciation of the yen heating up again and political pressure to maintain low interest rates gradually fading, the Bank of Japan has reactivated its previous hawkish rhetoric. Two people familiar with the Bank of Japan's thinking indicated that the change in its rhetoric over the past week has shifted the focus from earlier concerns about the U.S. economy back to the inflation risks posed by the yen's weakness, aiming to remind the market that a rate hike in December is still possible. Japanese Prime Minister Fumio Kishida and Bank of Japan Governor Kazuo Ueda held an important meeting last week, which seems to have alleviated the new government's political opposition to raising interest rates. However, sources pointed out that whether to raise rates in December or delay it to January remains a delicate choice, as the Fed's interest rate decision will influence the yen's movements, and the Fed's interest rate decision will be announced one week before the Bank of Japan's meeting.