BOJ Insider Sees 20-30% Chance of Back-to-Back Rate Hikes

Kazuo Momma, a former BOJ insider and current executive economist at Mizuho Research & Technologies, believes there's a 20-30% chance of consecutive rate hikes by the Bank of Japan. In an interview with Bloomberg, Momma stated that the basic pace for future rate decisions will likely be once every three months, but acknowledged there's also a reasonable chance of back-to-back hikes.

Momma's comments come after Governor Kazuo Ueda's board raised rates three months after the June move at a faster clip than previously expected. The BOJ has been stressing the risk that underlying inflation could rise above 2%, and Momma doesn't think this risk will diminish over the next three months.

Recent numbers have added to these concerns, with the BOJ's price trend measure rising to 2.6% in August from 2.3% in July. With the benchmark rate still at 1.25%, Momma believes the most compelling argument for a quicker pace of rate hikes is the upside price risks.