A hold with an effective 2% declaration and a firm Ueda press conference would support the yen and pull December hike pricing forward, pushing short-end JGB yields higher. The asymmetric risk is the vote: if the two reflationist members switch from opposing a hike to calling for a cut, the dovish signal could outweigh the hawkish language and trigger yen selling. USD/JPY is also exposed to this week’s Fed meeting. A surprise US hike that sent the pair sharply higher is the kind of emergency that, per the Nikkei report, could put a back-to-back BoJ move on the table. Oil-driven inflation pressure from the Iran conflict adds to the case for a firmer BoJ tone.---Earlier:BOJ preview: Daiwa sees hold, but 2% inflation call could open door to December hikeBOJ to hold at 1.25%, but Ueda signals further hikes toward neutralNikkei slips, bounces, as Iran oil fears weigh; ING sees BOJ holding at 1.25%, two hikes in 2027Still to come:Japan services PPI preview: 3.7% pace in focus ahead of Friday’s BoJ decision---The BoJ is set to stand still on rates this week while moving a big step forward on rhetoric, unless two dovish dissenters steal the headlines and the yen pays for it.Summary:MUFG expects the BoJ to hold at its October 29-30 meeting, with back-to-back hikes considered only in a serious emergency, according to a Nikkei report citing a senior officialThe updated Outlook Report is likely to effectively declare underlying inflation has reached the 2% target, a new phase for policy normalisation under UedaAfter last week’s G20 meeting, Ueda said underlying inflation was broadly close to 2% and that the BoJ could not tolerate a further riseMUFG expects a relatively hawkish tone at Ueda’s post-meeting press conferenceThe key risk: the two board members who opposed September’s hike could dissent against a hold and call for a cut, likely prompting yen sellingUS Treasury Under Secretary Erin Browne was reported as saying Japan is no longer in deflation and policy should adjustThe Bank of Japan’s policy meeting on October 29 and 30 is unlikely to deliver a rate hike, but it could mark a turning point in how the central bank describes inflation, according to a preview from MUFG. The bank expects the BoJ’s updated Outlook Report to effectively declare that underlying inflation has reached the 2% price stability target, which would take the normalisation pursued under Governor Kazuo Ueda into a new phase.A back-to-back increase looks off the table. MUFG noted a Nikkei report citing a senior BoJ official as saying the bank would consider consecutive hikes only in a serious emergency. MUFG said that could in theory include a sharp rise in USD/JPY following an unexpected rate hike by the Federal Reserve, though it sees that scenario as unlikely. The BoJ raised its policy rate to 1.25% in September.Ueda has already been laying the groundwork for a firmer message. Speaking after last week’s G20 meeting, he said underlying inflation was now broadly close to 2% and that the BoJ could not tolerate a further rise. That built on his remarks after the September meeting that the policy phase had changed, and reinforced the bank’s sharper focus on containing inflation. MUFG therefore expects the tone of Ueda’s post-meeting press conference to be relatively hawkish.External pressure points in the same direction. US Treasury Under Secretary for International Affairs Erin Browne was reported over the weekend as saying Japan is no longer in a deflationary environment and that its monetary policy should adjust accordingly.The main risk MUFG flags comes from inside the board. The two members who voted against the September rate hike could dissent again, this time opposing a hold and instead calling for a rate cut. MUFG said such a move by the BoJ’s reflationist members would reinforce the bank’s dovish image and would likely prompt yen selling, undercutting the hawkish signal from the Outlook Report and Ueda’s press conference.For markets, the week’s outcome may therefore hinge less on the rate decision than on the vote split and the language around underlying inflation.Bank of Japan Governor Ueda This article was written by Eamonn Sheridan at investinglive.com.