Japan Economy Minister Sees Only 'Moderate' Inflation Risks

Japan's economy minister, Minoru Kiuchi, expressed optimism about inflationary risks in the country. According to Kiuchi, Japan has seen only moderate rises in consumer prices, with a year-on-year increase of 1.7% in June. This assessment contrasts with that of the Bank of Japan (BOJ), which recently warned of the risk of inflation overshooting its 2% target.

Kiuchi noted that while costs from the Middle East conflict have not yet been fully passed on to consumers, there is a possibility that this could happen gradually over summer and autumn. However, he emphasized that average real wages are expected to increase nearly 1% during the current fiscal year ending in March 2027.

Kiuchi also highlighted the government's focus on cushioning households from rising inflation through fuel subsidies. He expressed support for the BOJ's policy of guiding a stable and sustainable achievement of its 2% inflation target, stating that 'we hope the BOJ continues to guide appropriate policy'.