The Bank of Japan’s (BOJ) major policy shift this week raises the likelihood of another rate hike in October, as well as quarterly hikes, a former director of the bank responsible for monetary policy said.
“There is a high probability that the rate will be raised in October,” Kazuo Momma, the former BOJ governor, said on Thursday. “The BOJ’s policy response function has now changed. This of course means that there is also a chance of another hike in January.”
Momma’s comments are likely to prompt a revision in BOJ watchers’ view of the likely path for interest rates, following hawkish signals on Wednesday, when the central bank raised borrowing costs for the second time this year.
