Former CFO Takehiko Nakao: Bank of Japan should raise rates at every meeting, target rate needs to exceed 2%
智通财经2026/08/17 04:21- Takehiko Nakao, who stepped down as Vice Minister of International Affairs at the Ministry of Finance in March 2013, said on a Tokyo TV program on Monday that the Bank of Japan should raise its benchmark interest rate at every monetary policy meeting, aiming to lift the policy rate above 2% in order to narrow the interest rate gap with the United States and alleviate the persistent downward pressure on the yen.
- He pointed out that even if Japan has raised its policy rate to 1%, the inflation-adjusted real rate remains negative, while real rates in other major countries are all in positive territory. Considering Japan’s current inflation level is around 2%, raising the policy rate to 2.25% or 2.5% would not be an unusual level.
- Traders are closely watching the timing and pace of the Bank of Japan’s next rate hikes. In July, the Bank of Japan kept its rate unchanged at 1.00%, but Governor Kazuo Ueda explicitly warned of upside risks to inflation after the meeting, keeping the possibility of a rate hike as early as September open. As of Monday midday in Tokyo, overnight index swap data showed markets pricing a 79% probability of a rate hike at the Bank of Japan’s September 18 meeting. Well-informed sources revealed that the Sanae Takaichi government also supports a near-term rate hike.
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