The Bank of Japan may raise interest rates in December, according to a CNBC survey.

• According to a poll of 32 analysts by CNBC, there is agreement that there will be no change at this week's BOJ meeting, which ends on Friday.
• The outlook for the October and December meetings is less certain.
• CNBC's polled analysts forecasted a year-end exchange rate of 140.2 yen to 1 U.S. dollar.

According to a new CNBC International survey, there is disagreement among economists, FX strategists, and Japan-focused fund managers regarding the timing of the Bank of Japan's next interest rate hike.

Last month, BOJ Governor Kazuo Ueda stated that the central bank would maintain its policy of raising interest rates if inflation remained stable, while also keeping a close eye on financial market trends.

While all 32 analysts surveyed by CNBC agree that there will be no change at this week's BOJ meeting, which ends on Friday, the outlook for the October and December meetings is much less clear. The survey was conducted from September 2-13.

Analysts believe that the early August volatility spike, the ruling LDP leadership contest, and the need for more evidence of wage-price dynamics make it unlikely that the Bank of Japan will make a rate change in September.

Fitch Ratings' economics team director Jessica Hinds stated that the central bank is likely to proceed cautiously and let the effects of the July rate increase fully manifest.

According to CNBC's survey, 18.75% of respondents anticipate a hike for the October meeting, while 25% believe it is a possibility.

While 25% of analysts predicted a December hike, 31.25% believed the BOJ could adjust monetary policy during a "live meeting" based on economic data.

Allianz Global Investors' global chief investment officer for multi asset, Gregor Hirt, predicts a high probability of a single interest rate increase in 2021, with October being the most likely month.

The BOJ may consider raising interest rates again with strong inflation, wage, and growth data, as global yield curve repricing supports Japanese bonds, easing the impact of any policy changes and allowing the Japanese economy to adjust.

UBS's chief Japan economist, Masamichi Adachi, predicted an October move for the BOJ Tankan survey, provided that market conditions remain stable and there is "little political noise in both Japan and the U.S."

Richard Kaye, a portfolio manager for Japan equities at Comgest, stated to CNBC that it is highly unlikely the central bank will raise rates again this year, especially if the Japanese yen continues to appreciate.

If the yen returns to its long-term average of 120-30/U.S. dollar, a significant contributor to Japanese inflation, imported commodity costs, will be resolved, according to him.

"The rate or yield gap with the U.S. is the primary factor influencing the value of the yen, and the Fed is the key player in this relationship, with indications suggesting that it may reduce interest rates."

It is predicted that the U.S. Federal Reserve will reduce interest rates after its meeting on Wednesday.

In July, the BOJ surprised some market participants by raising borrowing costs to 0.25%, which led to a major drawdown of global equities and a rapid appreciation in the yen.

Last month, a Reuters poll of economists predicted a 57% probability that the BOJ would increase interest rates before the end of the year.

Japanese yen and portfolio positioning

Analysts predict an average end-of-year exchange rate of 140.2 Japanese yen to one US dollar, according to a survey conducted by CNBC involving 28 experts.

Last week, the dollar fell to 140.71 against the yen after the U.S. presidential debate and BOJ board member Junko Nakagawa stated that the central bank would continue to adjust policy if the economy performs as expected. On Monday, the dollar weakened below the 140 mark against the yen as traders grew more confident that the Fed would choose a larger rate cut this week.

UBP Investments' managing director and senior funds manager, Zuhair Khan, stated that his objective is for the fund's portfolio to remain resilient if the yen appreciates significantly.

The Japanese market is expected to become more range-bound until the end of July, according to the fund manager. He stated that the fund's longs include cash-rich companies that may engage in large share-buybacks or management buyouts.

Okamura, a senior vice president and portfolio manager at Neuberger Berman, stated on CNBC that his forecast is for a stronger yen and a revival of the domestic economy, which would benefit smaller to mid-cap stocks.

"We remain committed to identifying high-quality companies with robust pricing power that can effectively transfer increasing import costs. Additionally, companies that are shifting their approach to capital management and corporate governance are crucial from an engagement standpoint."

The Bank of Japan will issue its September policy statement on Friday.