Sakurai: "BOJ Likely to Raise Rates Again in January"

Forex - Former member of the Bank of Japan (BOJ) Policy Board, Makoto Sakurai, stated that it is probable for the Bank to raise interest rates in the coming months, with January emerging as the most likely timing for greater clarity on political and market developments. Sakurai indicated that the central bank aims to increase the short-term borrowing costs, which are currently at 0.25%, to 1.5% or 2% by the end of President Kazuo Ueda's term in April 2028.

Sakurai mentioned, "The BOJ likely wants to raise rates once again by March next year. The exact timing will largely depend on market and political developments. Given that domestic politics remain volatile, it may be difficult to act in December. January appears more likely as the BOJ will have more data, including whether consumer and wage increases will continue."

However, Sakurai noted that if the yen continues to decline towards its July level of 162 against the dollar, the likelihood of a rate increase in December would increase. Sakurai added, "President Ueda emphasized the determination to continue raising rates in last week's press conference, which seems to reflect the BOJ's desire to avoid triggering excessive yen depreciation."