11:24 - 17.08.2026

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August 17, Fineko/abc.az. Takehiko Nakao, Japan's former Vice Minister of Finance for International Affairs, stated that the Bank of Japan (BOJ) needs to raise interest rates at every meeting to push the policy rate above 2% in order to reduce pressure on the yen and narrow the interest rate differential with the US.

Speaking to TV Tokyo, Nakao noted that despite the BOJ raising its policy rate to 1%, real interest rates in Japan remain negative. He stressed that bringing the policy rate to 2.25%–2.5% would be a reasonable step under current economic conditions.

According to Bloomberg data, market participants are pricing in a 79% chance of a rate hike at the BOJ's September 18 meeting. Analysts suggest the central bank could follow up with another hike in December and might even opt for a larger 50-basis-point increase instead of 25. Meanwhile, Japan's 10-year government bond yield has risen to 2.91%, hitting its highest level in nearly three decades.