Recent September 2026 Bank of Japan action lifting the policy rate to 1.25% and Governor Ueda’s emphasis on anchoring underlying inflation near the 2% target have positioned a further 25-basis-point increase as the leading December outcome, with 65.5% market-implied odds. August CPI held at 1.9% year-over-year while core measures remained below target, reflecting contained price pressures despite yen weakness and tight labor markets. Trader consensus, aligned with economist surveys, anticipates measured normalization rather than acceleration, though the 30.5% probability of no change leaves room for softer data or October outlook revisions to alter the path. The December meeting remains the next clear catalyst after the late-October policy gathering.