Japan has seen only moderate rises in consumer prices so far with the pass-through of higher costs from the Middle East conflict remaining limited, Economy Minister Minoru Kiuchi said on Tuesday, offering a sanguine view on inflationary risks.<\/p>\n
The assessment contrasts with that of the Bank of Japan, which last weekissued its strongest warning to date on the risks of inflation overshooting its 2 percent target.<\/p>\n
“The overall consumer price index rose 1.7 percent year-on-year in June, showing only moderate rises,” Kiuchi told a news conference, when asked about the BOJ’s warning.<\/p>\n
“We do need to be vigilant to the possibility that costs could be gradually passed onto food and other consumer goods from summer through autumn,” he added.<\/p>\n
But average real wages are expected to increase nearly 1 percent during the current fiscal year ending in March 2027, Kiuchi said, stressing the government’s focus on cushioning the hit to households from rising inflation through fuel subsidies.<\/p>\n
“We hope the BOJ continues to guide appropriate policy to stably and sustainably achieve its 2 percent inflation target,” said Kiuchi, who is known as an advocate of loose monetary policy.<\/p>\n
Kiuchi has attended the BOJ’s recent policy meetings including last week and in June, when the central bank raised interest rates to a 31-year high of 1 percent.<\/p>\n
At the June meeting, Kiuchi said the BOJ must be held accountable for its decision and respond nimbly if the economy faced “extreme volatility,” a summary of opinions at the meeting showed, remarks markets saw as signalling the government’s reservations over the central bank’s rate-hike plans.<\/p>\n
Reuters<\/p>\n
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