UOB's economist Alvin Liew stated that Japan's political situation may provide an early reason for the Bank of Japan to raise interest rates. After the ruling coalition lost its majority in parliament, attention may shift to the formation of the next government by Shigeru Ishiba. This transitional period could provide the Bank of Japan with an opportunity to normalize monetary policy, rather than waiting for the formation of an uncertain and likely unsupportive (rate hike) major political coalition. UOB generally believes that the Bank of Japan will resume rate normalization in the fourth quarter, but the conflicting view is that the Bank of Japan may raise rates by 25 basis points to 0.50% at this week's meeting, with UOB considering this to be the terminal rate.