BOJ Rate Hikes Loom: Ex-Official Sees September Move and 2.75% Peak

Former Bank of Japan board member Seiji Adachi predicts that the BOJ will raise interest rates on September 18th, and possibly again in January. This would mark the start of a hiking cycle, rather than a one-off adjustment.

Adachi believes that staying put risks another yen selloff, which could quickly feed into higher prices at home due to the increased cost of imported goods. He also points to comments from US Treasury Secretary Scott Bessent encouraging Governor Kazuo Ueda to raise rates, making it politically easier for the BOJ to act.

Adachi's forecast puts a 2.75% endpoint on interest rates, potentially reaching above 2% by the end of next year, surpassing the median forecast in a Bloomberg survey of 1.5%.