Key Facts
• Junko Koeda, BOJ Policy Board member, gave her first interview since March appointment.
• Food prices, especially rice, are higher than expected, impacting consumer inflation.
• Japan’s core CPI (excluding fresh food) rose 3.7% YoY in May, highest since January 2023.
• Consumer inflation has exceeded BOJ’s 2% target for 38 consecutive months.
• BOJ’s May forecast for FY2025 core CPI was a 2.2% increase.
• BOJ maintained monetary policy for the third consecutive meeting in June.
• BOJ plans to reduce government bond purchases from ¥2.9 trillion (Q1 2026) to ¥2.1 trillion (Q1 2027).
• Koeda emphasized monitoring inflation expectations and corporate price-setting behavior.
• She noted global economic risks but downplayed the likelihood of severe downturns.
• Koeda is the youngest BOJ Policy Board member at 49 and one of two female members.
• U.S. tariffs on Japanese imports, announced by Trump, add economic uncertainty.
• BOJ’s balance sheet exceeds ¥700 trillion, raising discussions on optimal size.
Summary
Junko Koeda, a Bank of Japan (BOJ) Policy Board member, highlighted rising food prices, particularly rice, as a key driver of Japan’s higher-than-expected consumer inflation. In her first interview since her March appointment, Koeda expressed concerns about the potential impact on core inflation, which remains above the BOJ’s 2% target for 38 consecutive months. May’s core CPI rose 3.7% year-on-year, marking six months of 3%+ growth. The BOJ maintained its monetary policy in June and plans to reduce government bond purchases by 2027. Koeda also addressed global economic risks, U.S. tariffs, and the BOJ’s ¥700 trillion balance sheet, emphasizing the need for careful policy adjustments. As the youngest and one of two female board members, Koeda’s insights reflect a focus on balancing inflation control with economic stability.
