Band Leika Kihara
TOKYO, December 15 (Reuters) – Bank of Japan Governor Haruhiko Kuroda said on Wednesday the country’s consumer inflation could approach its 2% target as rising commodity costs push up wholesale prices.
But he said the central bank would keep its ultra-loose monetary policy to ensure that any price hikes were accompanied by higher wages and a recovery in the economy.
“It is true that there is a chance that consumer inflation will approach 2% through various channels,” Kuroda told parliament.
âBut what is desirable is for the economy to recover steadily and increase corporate profits, leading to higher wages and inflation. We will patiently maintain an ultra-easy policy to achieve this as soon as possible. possible, “he said.
Kuroda also said recent wholesale price hikes are unlikely to immediately raise consumer inflation, as Japanese companies tend to avoid price hikes even when rising costs hit margins.
“I don’t think the Japanese economy is in a state of stagflation,” he said, dismissing the risk that the country would face an economic slump accompanied by higher inflation.
Wholesale inflation in Japan hit a record 9.0% in November, pushing gains for a ninth consecutive month, a sign that upward pressure on prices from supply bottlenecks and the rise in the cost of raw materials was on the rise.
But core consumer inflation remains stuck around zero as businesses remain cautious about passing costs on to consumers, fearing that cost-sensitive households may curb spending.
(Reporting by Leika Kihara Editing by Chang-Ran Kim and Sam Holmes)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.