Former Bank of Japan board member Makoto Sakurai predicts at least four more interest rate hikes to 1.5% by early 2028. He anticipates another hike by year-end, two in fiscal 2026, and one or two in 2028. The BOJ raised rates to 0.5% in January and may hike again in October or December.

Sakurai believes the BOJ will continue to raise rates to normalize monetary policy, citing Japan’s strong economy with big companies profiting from price increases and weak yen boosting exports. The central bank kept rates steady to assess the impact of U.S. tariffs, with the next hike possibly in October.

Resilient corporate morale and profits shown in the upcoming tankan survey on October 1 could support an October rate hike. Two board members dissenting in September may signal an impending rate increase, according to Sakurai. Most economists in a Reuters poll expect a 25-basis-point hike by year-end.

The U.S. administration’s weak-dollar policy may pressure the BOJ to raise rates steadily. A joint statement by the U.S. and Japan reaffirming commitment to market-determined exchange rates may warn Tokyo against intervening to combat yen rises. The BOJ’s cautious approach to inflation may lead to a stronger yen against the dollar.

Read more at Yahoo Finance: BOJ likely to hike rates to 1.5% under Ueda, former board member predicts