MUFG Research discusses the BoJ rate outlook.

"With USD/JPY rising back towards the 160.00-level, market participants will be watching closely to see if Japan is willing to step back into the FX market to support the yen. At the very least Japanese policymakers will be hoping the heightened threat of intervention helps to slow the pace of yen weakness," MUFG notes.

"Recent price action highlights that it will be difficult for the BoJ to avoid hiking rates in September and disappointing market expectations which would encourage further yen selling," MUFG adds.