The Bank of Japan is expected to raise interest rates roughly once every three months and reach 2% by around June next year as inflationary pressures broaden, former bank board member Makoto Sakurai said. The BOJ raised rates to 1.25% in September, a 31-year high, and has increasingly focused on preventing inflation from exceeding its 2% target. Japan’s crude-import costs have risen around 70% to 80% from levels before the US attack against Iran in February, while a weak yen and strong AI-related demand are supporting manufacturers’ profits and adding to price pressures. Sakurai expects consumer inflation to exceed 3% by year-end through early next year, with another rate increase most likely in December after the BOJ upgrades its inflation forecasts in October. He said a particularly large forecast revision could prompt an October hike instead. Sakurai projects rates reaching 1.5% by year-end, 1.75% in the first quarter of 2027 and 2% by June next year, while noting the terminal rate could be higher if inflation remains near 3%. He also said dovish dissenters would not necessarily block further hikes, but faster tightening might not provide much support for the yen. Investors are expected to continue selling the yen and Japanese government bonds as long as Prime Minister Sanae Takaichi pursues expansionary fiscal policy.