BOJ Sees Interest Rate Hike to 2% by Next June

Former Bank of Japan board member Makoto Sakurai predicts that the BOJ will continue to raise its policy rate by 0.25 percentage points every three months, reaching 2% by next June.

This prediction comes after the BOJ raised its policy rate to 1.25%, the highest level in 31 years, at its September 17-18 monetary policy meeting.

Sakurai expects a high likelihood of the headline consumer price index exceeding 3% year-on-year from year-end through the fiscal year-end due to surging crude prices and inflationary pressure.

He also believes that the BOJ has reached a major turning point in its monetary policy management, prioritizing inflation response with the recent hike coming just three months after the previous one.