Central BanksMedium•15 October 2026•
1 min read
BOJ's Koeda Warns Against Excessive Caution on Rate Hikes
Key Facts
1BOJ board member Junko Koeda stated the bank should not be overly cautious about raising rates given upside risks to prices.
2Koeda estimated the neutral rate is likely considerably above 1% and could exceed 2% based on certain projections.
BOJ board member Junko Koeda stated the bank should not be overly cautious about raising interest rates given upside risks to prices. Reuters reported that Koeda estimated the neutral rate is likely considerably above 1% and could exceed 2% based on certain projections, necessitating timely policy adjustments.
During her speech on October 15, 2026, Koeda noted that underlying inflation appears to be anchoring around the 2% target while financial conditions remain accommodative. She highlighted that geopolitical shocks, particularly in the Middle East, continue to drive up commodity prices and import costs, supporting the case for further rate increases.