The probability of a rate hike by the Central Bank of Japan has dropped significantly this year, to about half of what it was a week ago.

The data from Jinshi on August 8th showed that within a week, the possibility of the Japanese Central Bank raising interest rates again this year was halved by swap market traders. Pricing by swap traders on Thursday showed that the probability of a 25 basis point rate hike by the Japanese Central Bank before the December meeting was only about 30%, compared to over 60% a week ago. Following Bank of Japan Governor Haruhiko Kuroda's hawkish message last Wednesday, Deputy Governor Masayoshi Amamiya sent a dovish signal on Wednesday, indicating that policymakers will avoid raising the interest rate when the market is unstable. Eiji Dohke, chief bond strategist at SBI Securities, said that the Bank of Japan has made a significant adjustment to its policy stance since last week's monetary policy meeting. He said that if the financial markets calm down, the Bank of Japan may start discussing another rate hike as early as December; however, the reaction of the yen may complicate the central bank's policy decision.