Former BOJ Chief Economist Sekine Sees High Likelihood of April Rate Hike, Warns of Inflation Upside Risks

A key voice from within the Bank of Japan's former leadership is signaling a decisive shift in monetary policy. Toshitaka Sekine, who served as the central bank's chief economist and is now a professor at Hitotsubashi University, assesses a high likelihood of an interest rate hike as soon as April. His forecast is not based on a stable outlook but on a clear warning: he sees mounting upside risks to inflation that could compel the BOJ to act.

Sekine's analysis carries significant weight due to his deep institutional knowledge and his previous role shaping the BOJ's economic assessments. His public stance moves the debate beyond abstract speculation, providing a concrete timeline and a specific policy action—an April rate hike—grounded in a professional risk assessment. This directly challenges any prevailing market assumptions of a more prolonged ultra-loose policy stance.

The intervention intensifies scrutiny on the BOJ's upcoming policy meetings and places internal pressure on Governor Kazuo Ueda's board to clarify its tolerance for inflation overshoots. It signals to global markets and domestic institutions that the era of negative interest rates may be concluding faster than anticipated, with profound implications for the yen, Japanese government bonds, and the broader cost of capital for the world's third-largest economy.