According to the latest projections from BofA Global Research, the Bank of Japan is expected to accelerate its rate hike pace to approximately once per quarter.

The forecast indicates rate increases in September 2026, December 2026, March 2027, and July 2027, ultimately pushing the policy rate to 2%.

BofA strategist Shusuke Yamada noted that coordinated U.S.-Japan foreign exchange intervention has raised the stakes for defending the yen, but sustained defense of the currency must rely on adjustments to monetary policy.