Economist: The Bank of Japan is expected to raise interest rates to 1.5% by 2027.

Harumi Taguchi of S&P Global Market Intelligence has stated that the Bank of Japan may raise its policy rate from the current 0.75% to 1.0% in July, and may raise it again in December and at some point in 2027. These rate hikes would bring the policy rate to 1.5%. The economist mentioned that if rising oil prices and a weakening yen exacerbate concerns about a second round of inflation, the Bank of Japan may further raise interest rates. Taguchi added that given the sustained increase in oil prices, the demand for the US dollar, expectations of a Federal Reserve interest rate hike, and concerns about Japanese fiscal expansion, the yen is unlikely to rebound in the short term. The latest exchange rate is 159.03 yen to the US dollar, approaching the level that could trigger intervention.