Former BOJ Policy Board member Kiuchi Takahide (木内 登英) expects a rate hike at the September monetary policy meeting, bringing forward his previous forecast of a December hike.
Kiuchi Takahide (木内 登英), executive economist at Nomura Research Institute and a former BOJ Policy Board member, said in an interview on the 26th that a rate hike at the September monetary policy meeting is highly likely. Citing the explanation from Governor Ueda Kazuo (植田 和男) at the meeting and the notable number of opinions in favor of a rate hike among the summary of opinions, Kiuchi said a September hike is highly likely.
Kiuchi expects the policy rate to rise to 1.5% in January next year and 1.75% in October following a September rate hike. The BOJ left its policy rate at around 1.0% at its July meeting, but referred to concerns about upside risks to prices and the possibility of accelerating the pace of rate hikes.
Market expectations for a September rate hike have risen following coordinated intervention by Japanese and US authorities, and expectations in the interest-rate swap market that the policy rate will be raised to around 1.25% in September have risen to approximately 90%. A rate hike by October is considered to be almost fully priced in.
Kiuchi served as a BOJ Policy Board member from 2012 to 2017 and opposed the Bank’s aggressive monetary easing. The article cites changes in the policy environment as the background to his bringing forward his rate-hike forecast.