BOJ’s Ueda skips Jackson Hole as September rate hike expectations surge

Bank of Japan Governor Kazuo Ueda will not attend the Federal Reserve's annual Jackson Hole symposium this week due to scheduling conflicts, the central bank announced on Wednesday, sending board member Naoki Tamura in his place and shifting market attention to next week's G20 gathering.reuters

The unusual substitution comes as expectations for a BOJ rate hike in September have surged dramatically. A Reuters poll conducted August 17-24 found that 57% of economists now expect the BOJ to raise its policy rate from 1% to 1.25% at its September 17-18 meeting — a sharp reversal from July, when just 5% anticipated any tightening within the quarter.fxstreet+1

A Hawkish Stand-In

Tamura, a former commercial banker considered one of the most hawkish voices on the nine-member board, has publicly called for raising interest rates once every few months to counter upside risks to prices. No media engagements have been scheduled for Tamura during the conference, the BOJ said. It is rare for an ordinary board member to attend Jackson Hole, which is typically represented by the governor or a deputy governor.news.futunn+1

Analysts note that whatever new Fed Chair Kevin Warsh says in his debut Jackson Hole speech will carry weight for Japan through its effects on the yen and bond yields. BOJ Deputy Governor Ryozo Himino is also set to deliver a speech and hold a press conference on Thursday, where markets will watch for signals about a potential September move.reuters+1

G20 and Intervention Aftermath

Ueda's absence has put the spotlight on whether he will appear at the U.S.-hosted G20 finance leaders' gathering in Asheville, North Carolina, next week. U.S. Treasury Secretary Scott Bessent has said he looks forward to meeting the BOJ chief there.news.futunn+1

A joint U.S.-Japan yen intervention last month, combined with pressure from Bessent, has led markets to nearly fully price in a September rate hike. However, more than two-thirds of economists surveyed rated the intervention as "not very effective" or "completely ineffective".reuters+1

Rising Terminal Rate Expectations

Beyond September, the outlook has shifted considerably. Among poll respondents, half now see 1.75% as the terminal rate for this tightening cycle, up from 19% last month, while the share choosing "2% or above" rose to 36% from 23% in July. Roughly 60% of analysts foresee the rate reaching at least 1.75% by end of Q3 2027.fxstreet+1

Ayako Fujita, chief Japan economist at JPMorgan Securities ↘ 0.84%, warned that "as the market has largely priced in expectations for a September rate hike, delaying the move could trigger market turbulence". The USD/JPY pair edged lower on the day as markets digested the shifting policy landscape.news.futunn+1