Sources say the Bank of Japan is considering raising interest rates in September and is accelerating the pace of tightening.

According to three informed sources, the Bank of Japan may raise interest rates as early as September and is considering a more aggressive pace of rate hikes thereafter, compared to the current rate of about twice a year. This move reflects the Bank of Japan's growing concerns about price pressures from the Middle East conflict, strong global demand for artificial intelligence, and the ongoing decline of the yen. Despite a rare coordinated intervention by Japan and the U.S. last month, the yen's downward trend continues. One of the sources indicated, "An early rate hike is a foregone conclusion," suggesting that the Bank of Japan is highly likely to raise rates at its next policy meeting on September 17-18. Another source shared a similar view, adding, "The Bank of Japan may also accelerate the pace of rate hikes."