The Bank of Japan will probably raise its benchmark interest rate next month, validating widespread market speculation, and follow up with another increase as early as January, according to a former BOJ board member.
As of Monday afternoon in Tokyo, traders were assigning a roughly 80% probability of a rate hike when the board delivers its next policy decision on Sept. 18.
With the yen still weak even after U.S.-Japan coordinated intervention, a decision to hold settings steady could reignite a sell-off of the currency, raising the risk of faster inflation due to costly imports, Seiji Adachi, who served on the board until March 2025, said Monday in an interview.
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