Megumi Fujikawa

Japan’s central bank could look past Middle East uncertainty and raise interest rates if inflation becomes a bigger threat to the economy than the risk of slowing growth, Gov. Kazuo Ueda said.

Bank of Japan Gov. Kazuo Ueda has been hospitalized and is expected to miss next week’s monetary policy meeting, the central bank said Wednesday.

The world’s hunger for artificial-intelligence chips is straining the industry’s ability to produce the materials they rely on, creating new pressure points that could slow the boom.

Japan’s central bank is widely expected to raise interest rates to 1% to counter the price shock stemming from the Middle East conflict.

While the Middle East conflict reduced the volume of oil flowing through the Strait of Hormuz, the resulting surge in energy costs and pivot toward alternative procurement channels likely drove up Japan’s import bill.

Consumer inflation remained steady last month, with economists noting that the full effect of higher oil prices has yet to emerge.

Chief Cabinet Secretary Minoru Kihara reaffirmed that officials will step in as needed to support the yen.

Opinions from the Japanese central bank’s recent meeting show a growing sense of worry about inflation and a need to lift interest rates at a steady pace to avoid falling behind the curve.

The Bank of Japan should raise interest rates steadily and consider speeding up the pace of tightening if inflation risks intensify, policy board member Naoki Tamura said.

Ayano Sato pledged to carefully watch the impact of a weak yen on prices, though she didn’t give any clear hints on her monetary policy stance.