A former Bank of Japan official has indicated that the central bank might accelerate the pace of its interest rate hikes later this year as it intensifies its efforts to counter inflationary pressures, potentially raising the benchmark rate above 2%.

Tsutomu Watanabe, a former BOJ official who left in 1999 and is now a professor emeritus at the University of Tokyo, stated in a Wednesday interview that the terminal rate for this cycle is likely to be higher than what many currently anticipate.

He suggested the final rate could settle around 2%, or perhaps slightly above that level.

Under the leadership of Governor Kazuo Ueda, the Bank of Japan has already raised its policy rate five times.

The most recent hike occurred last month, lifting the rate to 1%, which marks the highest level in 31 years.

A survey conducted following the June rate increase showed that a majority of economists expect the BOJ to implement another hike before the end of the year, with the terminal rate for this cycle projected to be around 1.75%.

Tsutomu Watanabe, recognized as one of Japan's foremost experts on inflation, believes there is currently no significant risk of inflation spiraling out of control.