Former Bank of Japan executive Kazuo Momma said the BoJ could raise its policy
rate at the October meeting for a second consecutive month, sooner than many
economists expect. He put the chance of back-to-back hikes at roughly 20-30%,
saying the move would signal the pace of tightening could accelerate versus a
baseline quarterly tempo. Momma warned the risk of underlying inflation rising
above 2% is unlikely to weaken and is more likely to increase over the next
three months. His base case is a terminal policy rate of about 2% by June or
July next year, implying roughly three additional 25bp increases by the policy
board.