0214 GMT - The Bank of Japan is likely to accelerate the pace of rate increases to deal with upside risks in inflation, but probably not as fast as some market participants anticipate, Morgan Stanley MUFG Securities economists say. The brokerage expects the BOJ to raise its policy rate to 1.25% from 1.00% next week and projects another 25bp increase in January 2027. Some forecast a 50bp increase next week or additional increases in October and December. Yet, it is difficult for the central bank to build a case for a 50bp increase, considering recent economic and inflation data and market conditions, the brokerage says. Uncertainty has risen again over the Middle East conflict and downside risks to the Japanese economy have also increased, the brokerage adds.
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