Moody's Analytics said in a note that it expected the Bank of Japan to hold its ground at its September 19 and 20 monetary policy meeting. Although the Bank of Japan has tightened policy faster than expected and hinted at the possibility of further rate hikes, Moody's expects the next rate hike to come in October. Japan's economy is struggling to shake off the gloom because of weak consumer spending and exports, the report said. "Inflation will rise sharply in the near term as the government reduces assistance to household energy bills ahead of the introduction of new support measures," Moody's said, forecasting core inflation to accelerate from 2.7 per cent in July to 2.9 per cent in August.