BOJ Rate Hike in October Now a Real Possibility, Says Ex-Official

The Bank of Japan (BOJ) may raise its benchmark rate for the second consecutive month in October, according to Kazuo Momma, a former executive director and current executive economist at Mizuho Research & Technologies. This would be sooner than many economists expect.

Momma estimates that there's a 20-30% chance of a rate hike at the next meeting on October 30. The BOJ last raised rates in September, and Governor Kazuo Ueda emphasized that the central bank is shifting its focus from achieving 2% inflation to preventing it from overshooting that target.

The BOJ's inflation gauge, excluding fresh food and temporary factors, accelerated to a 2.6% gain in August from 2.3% in July. This data supports Momma's assertion that the risk of underlying inflation rising above 2% is increasing.