On September 11, sources revealed that the Bank of Japan (BOJ) is expected to raise interest rates next week, most likely by 25 basis points, and may hint at a faster tightening pace if inflationary pressures increase. Raising the rate to 1.25% would mark a 31-year high for the BOJ's policy rate. This move comes just three months after the last hike in June, indicating a quicker tightening pace. Many within the central bank believe that conditions for another rate increase are forming as the economy enters a moderate recovery and price pressures build. The BOJ also anticipates that even with rates rising to 1.25%, financial conditions will remain accommodative. The market is closely watching Governor Kazuo Ueda for any clues regarding the future pace of rate hikes and the potential peak rate in this tightening cycle. Sources indicate that the BOJ may not have a predefined view on the terminal rate, as it depends on how past rate hikes affect the economy and the extent to which businesses pass on rising costs to households. There is also no consensus within the BOJ on the speed of rate hikes. Ueda is expected to avoid committing to a specific timeline for future rate increases but may reiterate his July statement that the BOJ could accelerate rate hikes if it believes financial conditions are too loose.