An economist from JPMorgan, who predicted that the BOJ's policy will be changed in April, eased in September

FUKUOKA (Reuters) – A prominent JPMThe Economist of Organ Securities, who predicted a change in the Bank of Japan's communication in April, said the central bank could lower interest rates in September due to rising global economic risks .

Hiroshi Ugai, chief economist of major brokerage firms and former head of the Bank of Japan, wrote in a research note released Friday that the BOJ will reduce its short-term interest rate target from -0.1% to -0.3%.

The measure would seek to avoid an undesirable yen surge that could hurt the Japanese export-dependent economy and would be triggered by a possible rate cut by the US Federal Reserve, Ugai said in the research note.

There is growing expectation in the markets that the Fed will reduce interest rates in the coming months to support growth under the pressure of the trade war between US President Donald Trump and China and the threats tariffs against other countries.

"Trump's economic war with China and Mexico will hurt global economic growth," Ugai said. The Fed's anticipated rate cuts in September and December could lead to appreciation of the yen, potentially forcing the BOJ to answer, he added.

Ugai said that he was not expecting that BOJ reduce the yield target of 10-year government bonds, even if negative rates were to widen in September.

A BOJ The reduction of its short-term interest rate target remains a minority opinion among market participants, as many believe that such a move would reduce the already reduced margins of financial institutions.

Ugai was one of the few economists who predicted the BOJThe decision in April to set a deadline for the first time specifying how long interest rates will remain extremely low.

Under a policy called yield curve control, the BOJ promises to direct short-term rates to -0.1% and 10-year bond yields around zero percent.

(Report by Tetsushi Kajimoto, edited by Kim Coghill)