9 July | Other

Bank of Japan’s Junko Koeda hints upward revision of inflation forecasts

Bank of Japan’s Junko Koeda hints upward revision of inflation forecasts

Junko Koeda, a Bank of Japan board member, said the regulator’s inflation outlook is likely to be raised. This would leave open the possibility of another rate hike this year, Bloomberg reports. 

According to the official, food prices have been rising faster than expected. Inflation has been at or above the Bank of Japan’s 2% target for more than three years now, with rice prices being among the main drivers recently. 

The central bank now forecasts the cost of living in Japan to gain 2.2% by March 2026, compared to economists’ median estimate of a 2.4% increase. 

The Bank of Japan’s next meeting will be held on July 30. Since interest rates are widely expected to remain unchanged, the main focus will be on the updated inflation outlook, the news agency says. This will be a key factor in determining the likely timing of a hike in borrowing costs.

Meanwhile, Junko Koeda pointed to high economic uncertainties surrounding the US tariffs and stated that it was necessary to assess incoming data before adjusting the policy.

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