BOJ Rate Hike Predicted for September Amid Inflation Concerns

Takuji Aida, an economic adviser to Prime Minister Sanae Takaichi, is predicting that the Bank of Japan (BOJ) will raise interest rates in September. According to Aida, this increase would be followed by another hike in January next year, with the BOJ reverting to a rate hike pace of once every six months afterwards.

Aida, who has been vocal about his opposition to BOJ rate hikes, believes that the current inflationary risks are a major concern. He stated that 'the premature, accelerated pace of rate hikes would weigh on the economy.'

The BOJ's next policy meeting is scheduled for September 17 and 18, with markets nearly fully pricing in a 25 basis point interest rate hike to 1.25%. This prediction has been heightened by U.S. Treasury Secretary Scott Bessent's recent comments calling for higher BOJ rates.

BOJ Governor Kazuo Ueda also signaled that the bank would consider raising rates, including in September, with a focus on whether inflationary risks are heightening. Finance Minister Satsuki Katayama has maintained that monetary policy decisions are the responsibility of the central bank.