A new survey shows that economists, foreign exchange strategists, and fund managers focused on Japan have divergent views on the timing of the Bank of Japan's next interest rate hike.

The Governor of the Bank of Japan stated last month that if inflation in Japan remains at normal levels, the central bank will continue to raise interest rates while closely monitoring financial market conditions.

The 32 analysts surveyed unanimously believe that no changes will be made at this week's Bank of Japan meeting. However, the prospects for the October and December meetings are less certain.

The soaring volatility in early August, the struggle for the ruling leader of the Liberal Democratic Party, and the desire for further evidence on wage price dynamics are the reasons why analysts generally believe that the possibility of interest rate adjustments in September is extremely low.

The survey found that 18.75% of respondents expect a rate hike at the October meeting, while another 25% of respondents indicated a possibility of a rate hike.

About 25% of analysts said that the Bank of Japan may raise interest rates in December, while 31.25% of analysts said that this is an "on-site meeting" that means the Bank of Japan may adjust monetary policy based on economic data.

Gregor Hirt, Global Chief Investment Officer of Allianz Global Investments, believes that there is a high possibility of a rate hike this year, most likely in October.

However, Richard Kaye, a portfolio manager at Comgest Japan, stated that the likelihood of the Bank of Japan raising interest rates again this year is extremely low, especially as the yen continues to appreciate.

28 analysts participated in another survey and were asked about their forecast for the US dollar to Japanese yen exchange rate at the end of this year, with an average forecast of 140.2.

Last week, after the US presidential debate, the US dollar fell to 140.71 against the Japanese yen. Bank of Japan member Shunko Nakagawa stated that as long as the economic performance meets expectations, the central bank will continue to adjust its policies.

As traders increasingly bet that the Federal Reserve will choose a larger rate cut this week, the US dollar fell below the 140 level against the Japanese yen on Monday.

USD/JPY daily chart