On Thursday, the Bank of Japan left its short-term policy rate unchanged at 0.25%, in line with market expectations. After the Bank of Japan issued a statement, USD/JPY falling slightly, hovering around 153.

If there is no rate hike in December, rate hikes will continue early next year as well.

A number of other countries are already on the brink of a rate cut cycle, most of them in Southeast Asia.

The Bank of Japan will certainly continue to raise interest rates, a temporary respite is not a long-term plan.

Latest data showed that core inflation in Tokyo, Japan, rose more than expected in August, and continued high inflation may support the central bank's continued monetary tightening.

Last week, global stock markets saw a sharp fall, with markets attributing the main reason to the unwinding of yen carry trades.

Bank of Japan Deputy Governor Shinichi Uchida said at an event on Wednesday that the central bank will not raise interest rates in times of financial market instability.

At the opening of trading on Monday morning, Japan's two main stock indexes, the TSE and the Nikkei 225, were both down sharply.

The Bank of Japan raised interest rates to about 0.25% from about 0.1% and also plans to reduce its purchases of Japanese government bonds, in principle by about 400 billion yen per quarter.

After the negative interest rate was lifted, super-large banks and local banks raised the interest rate on demand deposits for the first time in 16 years, which will benefit Japanese household deposits.

In the global spotlight, the meeting will reverberate in global markets, with the yen likely to fluctuate, either extending this month's significant rally or falling back to decades of lows.

On Thursday, the exchange rate of the US dollar against the Japanese yen rose to below 153, reaching a high of over two months.

According to informed sources, officials from the Bank of Japan may not make a final decision until the last minute after reviewing the latest market and economic data at the meeting that ends on July 31st.

According to data from the US Commodity Futures Trading Commission (CFTC), as of the week ending July 16, leveraged funds reduced their net short contracts in yen by 38,025, the largest reduction since March 2011.

Analysts said the yen would not have moved so suddenly and sharply unless it was the Bank of Japan that intervened.

While real wage growth in Japan, net of inflation, remains negative, that situation is likely to be reversed in July.

According to the summary, a member of the central bank's board of directors stated that if the basic inflation rate rises, the central bank will raise policy interest rates and adjust the degree of monetary easing.

But at least for now, the Bank of Japan has not found evidence that it can raise interest rates with an iron heart.

Major Asian stock indexes were broadly lower on Friday, buoyed by signs of slowing inflation in the U.S. Market focus shifted to the upcoming Bank of Japan meeting, which is expected to tighten policy further.

In May, Tokyo's core CPI (excluding fresh food) increased by 1.9% year-on-year, in line with market forecasts and higher than the 1.6% increase in April.