Takaichi adviser Aida projects BOJ rate hike in September, then quarterly to January

September 7, 2026 at 05:26 AM3 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Takuji Aida, an economic adviser to Prime Minister Sanae Takaichi, said on Monday the Bank of Japan is likely to raise interest rates in September and keep hiking at a pace of once every quarter until January next year. Aida, a reflationist seen as among the most vocal opponents of BOJ rate hikes, said he was pushing forward his forecast of the next increase from January 2027, as September provided a narrow window of opportunity for a hike before an extraordinary session of parliament convenes in early October. Markets have nearly fully priced in the chance the BOJ will raise its policy rate by 25 basis points to 1.25% at its next policy meeting on September 17 and 18.

Key Facts

Takuji Aida, economic adviser to Prime Minister Sanae Takaichi, projects the Bank of Japan will raise interest rates in September and then once every quarter until January next year.
Aida moved his forecast for the next hike forward from January 2027, citing a narrow window before an extraordinary parliament session convenes in early October.
Markets have nearly fully priced in a 25-basis-point increase to 1.25% at the BOJ's September 17–18 policy meeting.
BOJ Governor Kazuo Ueda said last week the central bank will debate raising rates in September, focusing on whether inflationary risks are heightening.
U.S. Treasury Secretary Scott Bessent last week voiced strong support for "decisive" monetary steps to combat yen weakness.

Aida's Rate Path Forecast

Takuji Aida, chief Japan economist at Credit Agricole and a member of the government's key economic panel, said the BOJ will likely follow the September hike with another increase by January next year. After that, Aida said in a research note, the BOJ will revert to a hike of around once every six months. Aida warned that "the premature, accelerated pace of rate hikes would weigh on the economy." He said he was pushing forward his forecast of the next increase from January 2027 because September provided a narrow window of opportunity before an extraordinary session of parliament convenes in early October.

Market and Policy Signals

Markets have nearly fully priced in the chance the BOJ will raise its policy rate by 25 basis points to 1.25% at its next policy meeting on September 17 and 18. Prospects of a September rate hike heightened as U.S. Treasury Secretary Scott Bessent continued to call for higher BOJ rates last week, voicing strong support for "decisive" monetary steps to combat yen weakness. BOJ Governor Kazuo Ueda said last week the BOJ will debate raising rates including in September with a focus on whether inflationary risks were heightening, signalling a strong chance of a hike this month. Finance Minister Satsuki Katayama has repeated that monetary policy decisions were the responsibility of the central bank when asked about Bessent's remarks.

Political Context

Parliament will debate, among other bills, legislation for Takaichi's plan to suspend for two years an 8% levy on food items. Aida's remarks suggest broadening consensus within dovish premier Takaichi's administration of the need for further BOJ rate hikes that could help arrest unwelcome yen falls. Takaichi has not made comments on monetary policy recently.