Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ’s headquarters in Tokyo, Japan, July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo
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- Kuroda says it’s not desirable for prices to rise too much
- BOJ must create an environment where wages rise more – Kuroda
- PM Kishida rules out amendment to government-BOJ joint statement
TOKYO, June 3 (Reuters) – Rising prices for essentials could weigh on household sentiment, Bank of Japan Governor Haruhiko Kuroda said on Friday, suggesting mounting inflationary pressures pose a risk to the fragile economy country.
Japan’s core consumer inflation rose 2.1% yoy in April, beating the central bank’s 2% target for the first time in seven years, mainly due to rising fuel and commodity costs. Continue reading
Kuroda said it is undesirable for prices to rise too much if household income growth remains weak.
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“Prices are rising, especially for goods that households buy frequently, such as gasoline and groceries,” Kuroda told parliament. “These kinds of price hikes could hurt consumer sentiment, so we need to monitor developments carefully.”
Kuroda has repeatedly said that the BOJ will not roll back its massive monetary stimulus as the recent rise in inflation was mainly driven by commodity costs and is likely to be temporary.
“What the BOJ hopes to achieve is a virtuous cycle where prices gradually rise along with strong economic growth and wage increases,” Kuroda said.
“It is important to create an economic environment in which wages can rise more,” he added, stressing the need to keep monetary policy extremely loose.
At the same parliamentary session, Prime Minister Fumio Kishida said government subsidies, such as to cap gasoline prices, would keep Japan’s inflation much lower than that of western economies.
“While taking steps to mitigate the pain of price increases is crucial, ensuring household income increases is also important,” Kishida said.
Kishida said there was no need to change a joint statement agreed between the government and the BOJ in January 2013, in which the central bank pledged to achieve 2% inflation with loose policies. Continue reading
Some opposition lawmakers have blamed the BOJ’s ultra-low interest rate policy for ratcheting up households’ living costs and called for an overhaul of the joint statement to give the central bank leeway to scale back stimulus.
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Reporting by Leika Kihara; Edited by Jacqueline Wong and Sonali Desai
Our standards: The Thomson Reuters Trust Principles.
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