BOJ Interest Rate Hikes Ahead: 2% by June 2027, Says Former BOJ Policy Board Member

The Bank of Japan (BOJ) is expected to raise interest rates roughly once every three months until they reach 2% by June 2027, according to former BOJ Policy Board member Makoto Sakurai.

This projection comes after the BOJ raised its benchmark interest rate to 1.25% in September 2026, its highest level in 31 years.

Sakurai expects the BOJ to accelerate its rate hikes due to mounting inflationary pressures and rising fuel costs, which are putting broad-based price pressure on the economy.

The BOJ could raise rates again as early as October, following a revision of its inflation forecast in its quarterly economic outlook report. Alternatively, it may wait until December to make the next move.

Sakurai projects that the BOJ's interest rate will reach 1.5% by the end of 2026, then rise to 1.75% in the first quarter of 2027 and finally hit 2% by June 2027.