BOJ to hike in December, seek terminal rate of 2%, says ex-central bank top economist

The Bank of Japan (BOJ) is anticipated to increase interest rates in December and persistently raise borrowing costs until they reach a terminal rate of 2% to tackle growing inflationary pressures, according to Seisaku Kameda, the former top economist at the central bank. This rate hike, although the global market turbulence that caused Japanese stocks to plummet on Friday, might not hinder the rate increase if volatility ceases before the December 17-18 meeting, Kameda informed Reuters.

The BOJ may halt the hikes if a complete collapse in the AI boom significantly impacts Japan's economy due to a severe downturn in US growth. However, the BOJ is expected to raise the policy rate to 1.5% in December and continue to increase it roughly once every quarter until it reaches the terminal rate of 2%.