BOJ Faces Pressure for Back-to-Back Rate Hikes Amid Yen Concerns

The Bank of Japan (BOJ) may raise interest rates at its next meeting in October, following an increase earlier this month to 1.25%. This shift comes as a result of the rapid pace of US rate hikes and pressure from international leaders.

Kazuo Momma, a former BOJ board member, predicts that the central bank will raise rates three more times by 0.25 percentage points each, taking the terminal rate to around 2% in June or July next year.

The comments come after the BOJ's September meeting, where some board members argued for faster rate increases due to rising prices and potential inflation risks. The central bank also released minutes from the Sept. 18 meeting, which showed that one member warned of a 'double shock' if the BOJ fails to respond adequately to price pressures.

US officials have expressed concerns about the yen's weakness, with President Donald Trump telling Japanese Prime Minister Sanae Takaichi during their summit on September 23 that the weak currency was making trade more difficult for the US. The yen has continued to slide, trading at 157.43 as of October 28.