At a speech in Sapporo, Bank of Japan Policy Board Member Takata Hajime (高田創) signaled a new phase from 2026 onward in which interest rates would be raised flexibly, without being bound to a set pace. He hinted at a rate hike from the current level of around 1.0% at the BOJ’s meeting on the 17th and 18th.
At a speech in Sapporo on 2 September, Bank of Japan Policy Board Member Takata Hajime (高田創) said that from 2026 onward the Bank would enter a new phase of raising interest rates flexibly, without being bound to a set pace, and referred to the possibility of a policy rate hike at the Monetary Policy Meeting to be held on the 17th and 18th. The BOJ has so far raised rates at a pace of around twice a year, but his remarks were taken as signaling a hike from the current level of around 1.0%. Attention turned to the market ahead of the next meeting.
At the speech, Takata pointed to the risk that upward pressure on prices stemming from the situation in the Middle East could push the underlying inflation rate, which the BOJ considers important, above its 2% target. He also explained that some economies overseas were shifting from a rate-cutting phase to rate hikes, while pressure for a weaker yen was also emerging. He indicated that the BOJ needed to signal to the market its intention to contain upside movements in prices and to take into account the impact on the foreign-exchange market.
He further expressed the view that expanding investment related to AI was stimulating the economy, and explained that the economy had entered a new phase of rate hikes. The BOJ has raised rates at a pace of around twice a year since 2024, but he called for the Bank to respond flexibly going forward in line with domestic and overseas economic conditions.