BOJ to hike in December, seek terminal rate of 2%, says ex-central bank top economist

Former Bank of Japan economist Seisaku Kameda expects the central bank to raise interest rates in December and continue increasing them next year towards 2 per cent. The forecast matters because inflation is strengthening and the BOJ has signalled a firmer effort to contain it.

Kameda said the policy rate could reach 1.5 per cent in December, followed by increases roughly once a quarter; if markets remain unstable, the next move could come in January instead. He said a prolonged market slump or a severe US downturn could delay tightening, while rising food and import costs are adding to inflation and a planned food sales tax cut may support consumption.