Aida Sees BOJ Rate Hike in September Amid Yen Weakness Concerns

Takuji Aida, an economic adviser to Japanese Prime Minister Sanae Takaichi, has unexpectedly projected that the Bank of Japan (BOJ) will raise interest rates in September. This is a significant shift for Aida, who is considered one of the most vocal opponents of BOJ rate hikes.

In his research note, Aida stated that he was pushing forward his forecast of a January 2027 rate hike to September, citing the narrow window of opportunity before an extraordinary session of parliament convenes in early October. The parliamentary session will debate several bills, including legislation to suspend for two years an 8% levy on food items.

Aida predicted that after the September rate hike, the BOJ will follow up with another increase by January next year and then revert to a hike of around once every six months. He emphasized that the premature pace of rate hikes would weigh heavily on the economy.