Goldman Sachs frames a September hike as already priced in, so the market-moving element of its call is the prospect of a faster tightening path beyond this meeting. A steeper hiking trajectory would typically support the yen, since it narrows the policy gap with other major central banks and makes Japanese assets relatively more attractive to carry-trade unwinds. That would cut both ways for the Nikkei: a firmer yen tends to weigh on exporter earnings, a heavyweight component of the index, while higher domestic rates generally pressure valuations for rate-sensitive and growth-oriented sectors more broadly. Goldman's own read-through is narrower, centred on higher Japanese government bond yields, arguing current low real yields sit awkwardly against what it sees as strong domestic fundamentals.---The European Central Bank hiked rates last week, the Federal Reserve is expected to hike on Wednesday this week, and the Bank of Japan should round out the first of Trump's war-led co-ordinated global rate hikes:A BOJ rate hike is coming, but can the Japanese yen hold its gains?BOJ hike is a given, the real question is pace and terminal rate---Goldman Sachs says the Bank of Japan's next hike is all but certain, and is increasingly betting on a faster tightening pace that could bring a second move as soon as December.Summary:Goldman Sachs says a hike at the Bank of Japan's September 17 to 18 meeting looks like a done deal.The bank sees growing consensus that the BoJ could speed up its hiking pace, potentially with an additional move in December.Goldman cites higher energy prices, AI-related demand, yen depreciation and accommodative financial conditions as upside risks to inflation that could encourage faster tightening.The bank argues a quicker pace of hikes could help address rising long-end Japanese government bond yields and ease concerns the BoJ is falling behind the curve.Goldman expects fiscal policy to stay accommodative under Prime Minister Takaichi, adding further upward pressure on inflation.The bank's investment view is that JGB yields have room to rise further, saying current low real yields look inconsistent with robust domestic fundamentals.Goldman Sachs says a rate hike at the Bank of Japan's meeting this week is close to a foregone conclusion, and argues there is growing reason to think the central bank could pick up its tightening pace, potentially moving again as soon as December. The BoJ meets on September 17 and 18, and the bank's note frames the coming decision less as a question of whether policymakers will hike than of how quickly they follow up.Goldman points to a cluster of forces it sees pushing inflation risk higher: elevated energy prices, robust AI-related demand, a weaker yen and financial conditions it still regards as accommodative. Taken together, the bank argues these factors could encourage the BoJ to tighten policy at a faster clip than markets currently expect. It also points to Prime Minister Takaichi's fiscal stance, which Goldman expects to remain accommodative, as a further source of upward pressure on prices.A faster hiking path carries implications well beyond the bond market that Goldman's note touches on. The bank's own focus is on Japanese government bond yields, where it sees room for a further rise given what it calls a mismatch between low real yields and strong underlying domestic fundamentals. But a quicker tightening cycle would also be expected to filter through to the yen and Japanese equities. A steeper path for rates tends to support the currency by narrowing Japan's yield gap with other major economies, which can in turn unwind carry trades built on yen funding. That dynamic has a mixed read-through for the Nikkei: a stronger yen typically weighs on the earnings outlook for Japan's large exporter base, even as higher hiking odds pressure valuations across more rate-sensitive parts of the market.Goldman frames the faster-hiking scenario partly as a credibility exercise for the BoJ, arguing that accelerating the pace could help address concerns that the central bank has fallen behind the curve on inflation. Should the BoJ deliver a hike this week and signal openness to moving again before year-end, attention is likely to turn quickly to how the yen and Nikkei absorb that shift in expectations, alongside the JGB market reaction Goldman is most directly flagging. This article was written by Eamonn Sheridan at investinglive.com.