BOJ may accelerate quarterly rate hikes to 2% by mid-2027, says ex-board member

In an interview, former BOJ board member Makoto Sakurai warned that the central bank will probably increase interest rates about once every three months, aiming for a 2% terminal rate by June next year. He linked the policy shift to soaring crude-oil import costs, which have risen 70-80% since the February US strike against Iran, and to a weak yen that is boosting manufacturers' profits and demand-driven price pressures.

Sakurai noted that consumer inflation could top 3% by year-end, forcing further hikes to keep core inflation near the 2% target. He expects a rise to 1.5% by the end of the year, then to 1.75% in early 2027 and 2% by mid-2027, though a larger inflation forecast revision might bring an October move forward. While two dovish BOJ members may slow consensus, Sakurai said fiscal expansion under Prime Minister Sanae Takaichi will keep the yen and JGBs under pressure despite tighter policy.