BOJ Rate Hike Forecasted for September

Takuji Aida, economic adviser to Japanese Prime Minister Sanae Takaichi, believes the Bank of Japan (BOJ) will raise interest rates in September. This move is expected to be followed by gradual hikes through January next year.

Aida's forecast has been brought forward from January 2027 to September 2026, citing a relatively narrow window for the BOJ to raise rates before Japan's parliament holds an extraordinary session in early October.

The BOJ is expected to raise its interest rate by 25 basis points to 1.25%, which is almost fully priced into markets now.

Aida warned that raising interest rates too early and too quickly would weigh on the economy, echoing concerns about an unwanted weakening of the yen.