Japan's Economy Minister Offers Contrasting View on Inflation Risks

Economy Minister Minoru Kiuchi presented a relatively optimistic view on Japan's inflation prospects. According to him, consumer prices have only moderately risen by 1.7% year-on-year in June.

This assessment is at odds with the Bank of Japan's (BOJ) recent warning about the risks of inflation exceeding its 2% target. The BOJ had issued its strongest warning yet on this issue just last week.

Kiuchi acknowledged that there is a possibility that costs could be gradually passed onto food and other consumer goods from summer through autumn, but emphasized the government's focus on cushioning the hit to households from rising inflation through fuel subsidies.