MNI BoJ Preview-Oct 2025: On Hold, Focus On Dec/Jan Hike Risks

EXECUTIVE SUMMARY: 

• The BoJ is widely expected to hold rates steady at tomorrow's policy meeting outcome, which is also our bias.
• Market pricing is close to flat for the meeting outcome. A full 25bps hike is not priced by the market until around the March 2026 meeting.
• Focus is likely to rest on hiking risks before year end/early 2026. Whether we see additions to the two dissents from the September policy meeting (who were in favour of a 25bps hike) will be a key focus point, while broader board confidence in achieving the inflation outlook will also be eyed. 

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