The BOJ is expected to raise rates in December 2026 and continue monetary tightening from next year onward, bringing interest rates to 2%. Kameda Seisaku (亀田清作), a former BOJ chief economist, has pointed to the need to respond to rising inflationary pressures.
In the Tokyo market, the Bank of Japan (BOJ) has indicated that it will raise rates in December 2026 and continue raising them approximately every 3 months thereafter. Rates are ultimately expected to reach 2%.
Kameda Seisaku (亀田清作) said that monetary tightening should continue as inflationary pressures rise in the latter half of the 21st century, and also pointed to the possibility that volatility ahead of next month's policy meeting could lead to changes in the plan.
Some views suggest that the BOJ could postpone a rate hike if a collapse in the AI investment boom slows U.S. economic growth, depending on market conditions. Under other scenarios, the outlook was reaffirmed for a rate hike to 1.5% in December, followed by continued tightening inside and outside the year with the aim of reaching 2%.
The rate-hike cycle since September has been shorter than the hikes implemented in June and September, while a statement emphasizing the commitment to curb inflation supported expectations for the next rate hike.
Kameda Seisaku (亀田清作) pointed out that the BOJ may already have achieved 2% on underlying inflation measures and suggested that the pace could shift to once every 3 months following the rate hikes in June and July. Economists currently assess that the Japanese economy can cope with these rate increases.