Sources said the Bank of Japan favors a 25bp policy-rate increase this month to counter upside inflation risks and will keep the pace of further hikes flexible depending on economic and price developments.
Officials plan to discuss raising the rate and continue to view inflation risks as skewed to the upside; rising services prices and a persistently weak yen strengthen the case for action.
Sources said current economic developments broadly match BOJ projections and that a 50bp move is unlikely, reducing market odds of a large hike.
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