Bank of Japan may raise interest rates twice by March, says ex-official

Japan’s central bank just raised interest rates to their highest level since 1995. And if a former insider is right, it’s not done yet.

Makoto Sakurai, a former Bank of Japan board member, said in a June 19 interview that the BOJ could hike rates two more times before the end of the fiscal year in March 2027. The potential timeline: once in October 2026, and again by March, contingent on a sharp acceleration in inflation.

From zero to one, fast

The context here matters. On June 16-17, the BOJ voted 7-1 to raise its benchmark short-term rate by 25 basis points, bringing it from 0.75% to 1%. That’s the highest the rate has been since September 1995.

This was only the second rate increase since December 2025. And it’s part of a broader shift that started in March 2024, when the BOJ finally began exiting its ultra-loose monetary policy after 17 years of near-zero rates.