Bank of Japan board member Junko Koeda indicated a possible rate hike at the bank's next policy decision on December 19, amid the yen's weakening. In her first speech since joining in March, she highlighted the need for interest rate normalization due to low real rates. Yet, the yen fell further against the dollar following her comments.
Bank of Japan board member Junko Koeda signaled a potential rate hike as early as next month, emphasizing the need for normalization after the yen reached its lowest level in about 10 months.
"Given that real interest rates are currently at significantly low levels, I believe that the bank needs to proceed with interest rate normalization," Koeda said Thursday in a speech to local business leaders in Niigata Prefecture.
Her comments appeared aimed at delivering a hawkish message amid the yen's weakening, but the currency dropped further against the dollar, suggesting investors may have sought stronger signals. This was Koeda's first speech since joining the board in March, highlighting the importance of policy normalization in the context of the Japanese economy. The BOJ's next policy decision is scheduled for December 19.