University of Tokyo professor emeritus Tsutomu Watanabe said in an interview with Reuters that if next year's spring labor-management wage negotiations show prospects for wage increases on par with the previous year, the Bank of Japan could adopt a more aggressive rate-hike stance within this year, potentially shifting from the market's expected pace of once every six months to roughly once a quarter. Watanabe noted that the underlying inflation rate is already quite close to 2%, and the Bank of Japan is increasingly wary of the risk that underlying inflation will exceed 2%. He analyzed that at the current gradual pace of rate hikes, underlying inflation could reach around 2.2% by around July next year, and to subsequently bring it back down to 2%, the policy rate might need to be raised rapidly to around 2.5% to 3.0%. He cited next year's spring wage talks as a turning point for the Bank of Japan to switch to proactive policy management, saying that if the outlook is for wage increases similar to the previous year, the central bank could signal its stance through measures such as a large rate hike in December or shortening the interval between hikes. He also pointed out that the government needs to change its posture of restraining rate hikes, such as by declaring an end to deflation and revising the joint statement.