Masamichi Koike, senior marketing director at Sumitomo Mitsui Bank, one of Japan's largest banks, believes that if the economic trend continues, the Bank of Japan may raise the benchmark interest rate to 2%, the highest point in 30 years, which is more hawkish than the consensus forecast. As long as there is no recession in the US economy, the Bank of Japan is likely to raise the policy interest rate from the current 0.5% to 1% this year. “If the time comes to cool the economy or inflation, I think it must rise to 2%”. Koike had foresight of rising borrowing costs in Japan in the past. In September 2023, he predicted that continued inflation would drive short- and long-term interest rates up from rock bottom levels. Six months later, the Bank of Japan cancelled the negative interest rate policy. Koike believes that Japan's inflation rate will remain above 2% due to rising import costs due to disruptions in global trade. But he doesn't expect the rate hike to have a significant negative impact. He is also wary of buying treasury bonds and other foreign bonds. He doesn't expect the Federal Reserve to cut interest rates this year because the US economy is expected to stay healthy.

Masamichi Koike, senior marketing director at Sumitomo Mitsui Bank, one of Japan's largest banks, believes that if the economic trend continues, the Bank of Japan may raise the benchmark interest rate to 2%, the highest point in 30 years, which is more hawkish than the consensus forecast. As long as there is no recession in the US economy, the Bank of Japan is likely to raise the policy interest rate from the current 0.5% to 1% this year. “If the time comes to cool the economy or inflation, I think it must rise to 2%”. Koike had foresight of rising borrowing costs in Japan in the past. In September 2023, he predicted that continued inflation would drive short- and long-term interest rates up from rock bottom levels. Six months later, the Bank of Japan cancelled the negative interest rate policy. Koike believes that Japan's inflation rate will remain above 2% due to rising import costs due to disruptions in global trade. But he doesn't expect the rate hike to have a significant negative impact. He is also wary of buying treasury bonds and other foreign bonds. He doesn't expect the Federal Reserve to cut interest rates this year because the US economy is expected to stay healthy.