Former BOJ policymaker says October rate hike possible - report

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An ex-BOJ policymaker, Seiji Adachi indicated that an October rate hike by the BOJ cannot be ruled out, particularly if growth and inflation forecasts are revised upward, _Reuters _reported, citing an interview with Adachi.

A risk-focused approach suggests that the central bank is probably going to wait to raise rates until March, Adachi said. While he noted that a rate rise in October is possible if stronger-than-expected economic growth in Q2 pushes up the board's growth projection.

"Another 25-basis-point rate hike will do little harm to growth as borrowing costs will still be below levels deemed neutral to the economy," Adachi commented.

"But if the board revises up its growth forecasts and modifies its current forecast that inflation will briefly fall below 2%, there's little reason for the BOJ to hold fire."

The BOJ's quarterly "tankan" business survey, due on October 1, could influence the bank's decision on whether to raise interest rates next month, Adachi added.

However, broadly the markets roughly see a 50% chance of a rate hike at the next policy meeting on October 29-30.

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