SMBC Nikko economists say the BOJ will likely raise its policy rate from 1.00%
to 1.25% at the September meeting and expect two further hikes in January and
June 2027, taking the rate to 1.75%. They add import-driven inflation pressure
should ease after next summer, making a 2.00% peak — above market estimates of
the neutral rate — unlikely. OIS markets price an 84% chance of a September hike
and imply two additional hikes by early 2027.
