BOJ's Koeda calls for rate hike at 'appropriate pace'

FUKUOKA, Japan - Bank of Japan board member Junko Koeda said on Thursday the central bank should raise interest rates at an "appropriate pace" as underlying inflation may exceed its 2% target due to the prolonged conflict in the Middle East.

"Given the situation in the Middle East, I see some possibility that underlying inflation may exceed 2% looking ahead," Koeda said in a speech, adding that recent slight rises in long-term inflation expectations warranted attention.

"I believe it's reasonable to raise the policy interest rate at an appropriate pace to address high inflation while also considering the trade-offs for the economy," she said.

(Reporting by Leika Kihara; Editing by Tom Hogue)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published May 20, 2026 at 8:58 PM.