BOJ Seen Raising Rates Quarterly to 2% by June 2027, Ex-Official Sakurai Says

The Bank of Japan is expected to raise interest rates roughly once every three months, reaching 2% by around June 2027, former board member Makoto Sakurai said, citing broadening inflationary pressures. Sakurai said the BOJ will likely revise up its inflation forecasts at its October outlook report and hike again in December, possibly in October if the upward revision is large. He expects rates at 1.5% by year-end and 1.75% in the first quarter of 2027. Consumer inflation may exceed 3% by year-end through early next year, he said, after the BOJ raised rates to a 31-year high of 1.25% in September. He cited a roughly 70% to 80% spike in crude import costs, a weak yen and AI-driven demand. Sakurai said the yen won't rebound unless Prime Minister Sanae Takaichi changes her fiscal policy, with aggressive BOJ hikes only slowing the currency's declines.