Japan's economy will exceed growth forecasts this year, prompting the central bank to tighten monetary policy by mid-year, said Allen Sinai, president of Decision Economics Inc.

Sinai said he expects Japan's economy to grow 2 percent in 2018, and even faster in 2019, perhaps as much as 2.5 percent.

"What has snuck up on everybody is the world business cycle is really clicking," he said in an interview in Tokyo on Wednesday, where he was meeting with policymakers.