Former BOJ Official: Conditions for Japan’s Rate Hike in September Are in Place

ME News reports that on August 25 (UTC+8), former Bank of Japan official Seiji Adachi stated that the Bank of Japan is very likely to raise interest rates next month, aligning with widespread market expectations. Adachi, in an interview, said: “The Bank of Japan is essentially caught between a rock and a hard place. The market has fully priced in a rate hike. If the central bank does not raise rates, the yen could weaken significantly once again.” Previously, U.S. Treasury Secretary Bessent indicated that policy action is needed following foreign exchange intervention and expressed hope that Bank of Japan Governor Kazuo Ueda would raise interest rates. “Bessent has repeatedly hinted that the Bank of Japan will be the next institution to act,” Adachi said. “Given this, the government cannot tell the Bank of Japan, ‘Don’t do it.’” Adachi noted that inflationary pressures in Japan remain strong, and after a widely expected rate hike in September, the Bank of Japan is likely to continue raising rates. He added: “I believe the Bank of Japan will take further action in January. The rate hiking cycle is very likely to persist for some time, potentially extending beyond previous estimates of the cycle’s endpoint at 1.25% or 1.5%.” (Source: BlockBeats)