Core Viewpoint - The recent fluctuations in the USD/JPY exchange rate and the differing opinions within the Bank of Japan regarding monetary policy normalization have created a complex outlook for the market [1][3]. Group 1: Bank of Japan's Policy Divergence - There are differing opinions among the Bank of Japan's board members about the need to expedite the exit from ultra-loose monetary policy, with some members believing current inflation and wage growth conditions warrant a gradual exit [3]. - Some board members express caution, arguing that current inflation is primarily driven by import prices and energy costs, lacking a solid internal growth momentum, which could pressure consumption and business investment if interest rates are raised too quickly [3]. Group 2: Economic Data and Performance - Japan's economic performance has been under pressure, with August retail sales declining by 1.1% year-on-year, marking the first year-on-year drop since early 2022 and the largest decline in nearly three years [3]. - Industrial production also fell by 1.2% month-on-month in August, marking the second consecutive month of decline, which exceeded market expectations and indicates a weak manufacturing sector [3]. Group 3: Market Reactions and Expectations - Investors had previously anticipated potential action from the Bank of Japan in October, but confidence has weakened following the latest economic data [3]. - The market is also closely monitoring the U.S. monetary policy direction, with expectations that the Federal Reserve may adjust based on inflation and employment data, contrasting with the Bank of Japan's potential rate hike expectations [4]. - The USD/JPY exchange rate remains within a consolidation range for nearly seven weeks, with market participants adopting a cautious stance focused on economic fundamentals and policy developments rather than single-direction trading opportunities [4].