BoJ Koeda Flags Inflation Risks from Rising Rice Prices

Bank of Japan board member Junko Koeda said she is closely monitoring the potential second-round effects on underlying inflation from recent price hikes in rice and other food items, Bloomberg News reported. In an interview on Monday, Koeda noted it was too early to predict when the central bank might resume interest rate hikes due to ongoing economic uncertainty. “Recent hard data on inflation shows prices of rice and other food items are rising more than expected compared with the time of the BoJ’s May meeting, so I am watching developments carefully,” she said. While cost-push factors, particularly those related to food, are driving consumer inflation, which is currently hovering around 3%, the BoJ’s weighted median inflation measure remains below its 2% target. Still, Koeda emphasized she is “keeping an eye out” on how rising rice prices could influence households’ inflation expectations and underlying inflation.