The Bank of Japan (BOJ) should give this month the thumbs-up that underlying inflation is more or less on track to reach its 2% target. This mostly rhetorical move would serve to keep market expectations pinned that another rate increase is likely in December, according to sources who know the central bank’s thinking.

The central bank has already hiked rates to a 31-year high in September, but is hesitant to make consecutive rate increases. Policymakers are interested in knowing the overall effect of past rate hikes on the domestic financial climate that is tracked by the Ministry of Finance.

The BOJ is increasingly confident in its belief, as its latest economic data has been favorable, including the consumer inflation data from Tokyo released by the Statistics Bureau of Japan. The prices indicate a good price stability in response to the demand trend near the target price.

In addition, the central bank’s quarterly “tankan” business survey indicates continued high, although stable, corporate inflation expectations. Prices are tracking projections and have not increased significantly enough to warrant an immediate policy response this month.

The central bank is now in a new stage of efforts to keep underlying inflation from exceeding its target, Governor Kazuo Ueda recently said. The pressure on the Government of Japan and the BOJ to raise rates in October to offset a weakening yen has abated given the lowered chances for a U.S. rate hike this month.

Yet, although the national wage gains have been relatively strong (kept a close watch on by the Ministry of Health, Labour and Welfare), crude oil prices are climbing and wholesale inflation remains stable, indicating that the overall price increase is now entrenched.

At the September policy meeting some of the board members commented that it would be very soon before the underlying inflation reached the target. The BOJ is likely to make an official judgment in its next quarterly report due to be published after next week’s policy meeting on October 29-30.