BOJ Rate Hike Projected for September Amid Yen Weakness

Takuji Aida, an economic adviser to Japanese Prime Minister Sanae Takaichi, has projected that the Bank of Japan will raise interest rates in September and continue hiking at a pace of once every quarter until January next year.

Aida, who is seen as a reflationist and a vocal opponent of BOJ rate hikes, said he was pushing forward his forecast of the next increase from January 2027 due to a narrow window of opportunity before an extraordinary session of parliament convenes in early October.

According to Aida's research note, after the September rate hike, the BOJ will likely follow up with another increase by January next year. Thereafter, the central bank will revert to a hike of around once every six months.

Aida cautioned that the premature and accelerated pace of rate hikes would weigh on the economy.