Kazuo Momma, who once ran monetary policy at the Bank of Japan and is now executive economist at Mizuho Research & Technologies, told Bloomberg on Friday that "The basic pace will probably be once every three months, but there's also a reasonable chance that the BOJ could raise rates at consecutive meetings." He put the odds of back‑to‑back hikes at "around 20% to 30%."
His remarks came a week after Governor Kazuo Ueda's board raised rates three months after the June move, a faster clip than the prior roughly semiannual rhythm. Ueda said policy had moved into a new phase, with the focus shifting from lifting underlying inflation toward 2% to stopping it from overshooting that level. Momma added that the BOJ has been "stressing quite strongly that there is a risk that underlying inflation could rise above 2%," and, "Given that, I don't think that risk will diminish over the next three months. If anything, it's more likely to increase."
Fresh numbers backed that worry. On Friday, the BOJ's price trend measure, which omits fresh food and short‑lived influences, rose to 2.6% in August from 2.3% in July. Alongside upside price risks, Momma noted the benchmark rate is still just 1.25%. "Put those two things together, and the most compelling argument right now is that the BOJ should move relatively quickly to raise rates," he said.
In his base case, the policy rate climbs to around 2% by June or July next year via three more quarter‑point increases. Economists surveyed by Bloomberg, on median, see a slightly lower terminal rate of 1.75%.
When policy decisions are in focus, steady strategies help protect and grow your savings. Join Briefs Finance CEO Jaspreet Singh on September 29th for a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, where he shows how we're spotting investment opportunities as the dollar falls. Save your spot.
After the September meeting, the yen weakened even though the BOJ hiked. Two members of the policy board - Toichiro Asada and Ayano Sato - opposed the increase. Appointed earlier this year by Prime Minister Sanae Takaichi, who is known for supporting monetary easing, they are the board's most recent additions. Momma said, "I don't know if there will be dissents again, but I don't think they will change the course of BOJ rate hikes."
He also sees it as unlikely that the government will try to block the BOJ from normalizing policy, since that could feed further yen weakness. A softer currency adds to inflation pressures because Japan relies heavily on imported energy and food. By Friday afternoon, overnight swaps implied traders saw a 30% probability of a hike at the Oct. 30 decision.
Economists still expect a slower follow‑up. In a Bloomberg survey conducted before the September meeting, 58% picked January for the next move and about 35% chose December. Momma disagrees. "The focus of the debate is really whether the BOJ will conclude that it can't wait until December to raise rates," he said, adding, "I think the possibility of delaying the next hike until January or later is extremely low." This month also marked the first occasion when the BOJ, the Federal Reserve, and the European Central Bank each lifted rates within the same month.
If the BOJ tightens faster, expect more chop in Japanese yields and the yen, with knock‑ons to global rates and currency‑sensitive assets. Watch BOJ commentary into Oct. 30 to gauge how quickly a roughly 2% endpoint might come into view.
Keeping a clear plan makes navigating rate discussions easier and safeguards your financial progress. Our CEO Jaspreet Singh is hosting a FREE live investor workshop, How to Profit From A Dollar That's Losing its Value, on September 29th. Sign up free to join him live.
