BOJ Expected to Hike Rates Next Month Amid Inflation Concerns

Seiji Adachi, a former Bank of Japan board member, believes that the BOJ will likely raise its benchmark interest rate next month and again in January. This move would validate widespread market speculation, with traders assigning an approximately 80% probability to a hike when the board delivers its next policy decision on September 18.

Adachi warned that holding rates steady could reignite a currency selloff and raise the risk of faster inflation driven by costly imports. The yen remains weak even after coordinated US-Japan intervention, which has contributed to Adachi's concerns.