[Former Bank of Japan Official: Terminal Rate in This Rate-Hike Cycle May Exceed 2%] Jin10 Data, July 9 – Former Bank of Japan official Watanabe Tsutomu stated on Wednesday that the Bank of Japan might accelerate the pace of rate hikes later this year and eventually raise the benchmark interest rate to above 2% to curb inflation. Watanabe remarked, 'I believe the ultimate peak of interest rates will be higher than most people currently expect. The terminal rate will be around 2%, or slightly above that.' Watanabe added, 'Policy should be considered in a dynamic rather than static manner.' He further explained that the terminal rate is not only determined by the calculation of the neutral rate but also influenced by factors such as inflation overshooting before the Bank of Japan explicitly tightens policy. Watanabe noted that authorities had previously adopted a 'passive' policy approach, aiming to achieve a virtuous cycle of wage increases driving demand-led price growth. As core inflation approaches the 2% target, the committee may shift to a more proactive stance to prevent excessive price growth. According to some local media reports at the time, Watanabe was considered one of the potential candidates for the position of central bank governor alongside Ueda in 2023.