BOJ should raise policy rate at appropriate pace, says board member Junko Koeda

BUSINESS / Economy

BOJ should raise policy rate at appropriate pace, says board member Junko Koeda

Former economics professor and Bank of Japan board member Junko Koeda is the second among members who voted in favor of holding settings steady at bank's last policy meeting to have since signaled the likelihood of rate hikes to come. But she has also hinted at caution, saying it’s important to assess the impact stemming from the Middle East conflict. | BLOOMBERG

By Erica Yokoyama and Toru Fujioka
BLOOMBERG

May 21, 2026

Bank of Japan board member Junko Koeda has signaled support for raising benchmark interest rates, in the latest indication that momentum is building for a move as early as next month.

“I see some possibility that underlying inflation may exceed 2% looking ahead,” Koeda said Thursday in a speech to local business leaders in Fukuoka Prefecture. “I therefore believe it is reasonable for the bank to raise the policy interest rate at an appropriate pace to address high inflation while also considering the trade-offs for the economy.”

Koeda was among those who voted with the majority in favor of holding settings steady at the last policy meeting, on April 28, in a 6-3 decision that was the biggest split so far under Kazuo Ueda’s governorship. While Koeda didn’t specify a preferred timing for the next move, her comments may support speculation over a hike the next time authorities decide policy on June 16.