Markets put an 80 per cent chance on a September Bank of Japan rate rise
Traders assigned roughly an 80 per cent chance to a Bank of Japan increase on 18 September. The RBA held 4.35 per cent after weighing a 25 basis point rise, and Mexico plans Samurai notes.
Economics & Markets··Midday
Traders put an 80 per cent chance on the Bank of Japan's 18 September decision
Traders were assigning roughly an 80 per cent probability to a rate increase at the Bank of Japan's 18 September decision. Seiji Adachi, who sat on the Policy Board until March 2025, said in an interview on Monday that the bank probably moves then and raises again as early as January. He said holding settings unchanged could reignite a sell-off in the yen, which remains weak even after coordinated US-Japan intervention. A weaker currency raises import costs and with them the risk of faster inflation.[1]
The RBA weighed a 25 basis point rise, then left the cash rate at 4.35 per cent
Members of the Reserve Bank of Australia explicitly considered raising the cash rate target by 25 basis points at the 11 August meeting and decided unanimously to leave it at 4.35 per cent. Their reason was that policy already looked somewhat restrictive after three increases in 2026. The minutes set out that hold as the board's unanimous choice, with financial conditions judged somewhat restrictive after those three moves.[2]
Mexico plans a Samurai bond sale, its first in two years
Mexico plans to sell yen-denominated notes in as many as six tranches this week, with maturities from 3.5 to 20 years and pricing expected on 28 August. It last tapped the Samurai market in August 2024, selling 152.2 billion yen in five tranches. Initial price talk runs from 100 to 200 basis points over Tokyo overnight average rate mid-swaps depending on maturity. The sale comes with Mexico's ratings under pressure: S&P Global Ratings moved its outlook to negative in May, and Moody's Ratings cut the country to the lowest tier of investment grade, citing continued support for Petroleos Mexicanos. In July the United States said it would not renew the United States-Mexico-Canada Agreement, opting for annual reviews instead.[3]
