Import price inflation slowed sharply in August and if the yen continues to strengthen, it may turn negative as soon as September. That may prompt the Bank of Japan to judge near-term risks to inflation as broadly balanced rather than to the upside, but recent comments by BoJ Board members don't signal any change in tune. Accordingly, we're sticking to our non-consensus forecast that the Bank will hike its policy rate again at its October meeting.
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