BOJ Predicts Quarterly Rate Hikes Through June 2027

Former Bank of Japan board member Makoto Sakurai predicts that the central bank will raise its interest rate approximately once every three months, bringing it to 2% by June 2027. According to Sakurai, the BOJ will likely hike rates to 1.5% by the end of 2026 and then to 1.75% in the first quarter of 2027.

Sakurai believes that the Bank of Japan is increasingly focused on containing broader price pressures, including those caused by rising fuel prices. He notes that the cost of crude oil imports to Japan has risen by 70-80% in recent months compared with pre-US attack levels.

The former BOJ board member estimates that this could accelerate consumer inflation, which may exceed 3% by the end of the year and at the beginning of next year. He also linked inflationary pressure to the weak yen and high artificial intelligence-related demand, which supports the profits of Japanese manufacturers.