Former officials say the Bank of Japan may raise terminal interest rates twice this year or exceed market expectations

On February 5th, Hideo Hayakawa, former executive director of the Bank of Japan, stated that the central bank may continue to raise benchmark interest rates beyond the current market consensus, and may raise rates twice this year on the basis of last month’s rate hike. Hayakawa stated that based on his own assessment, he expects the Bank of Japan’s terminal interest rate for this cycle to be around 1.5%. This is higher than most analysts’ expectations, but in line with the International Monetary Fund’s (IMF) forecast.