BOJ Rate Hike Expected in September: Takuji Aida's Forecast

Takuji Aida, an economic adviser to Japanese Prime Minister Sanae Takaichi, has projected that the Bank of Japan (BOJ) will raise interest rates in September. Aida's forecast suggests a hike every quarter until January next year.

In his research note, Aida explained that September provides a narrow window for a rate increase before an extraordinary session of parliament convenes in early October. The BOJ is expected to follow up with another increase by January 2027, after which it will revert to a hike every six months.

Aida's remarks indicate broadening consensus within the dovish Takaichi administration on the need for further BOJ rate hikes to combat unwelcome yen falls. Markets have nearly fully priced in the chance of a September rate hike by 25 basis points to 1.25% at its next policy meeting.