Japan's Economy Minister Offers Sanguine View on Inflation Risks

Japan's economy minister offered a relatively optimistic view on inflation risks despite the Bank of Japan's warning about overshooting its 2 percent target.

Economy Minister Minoru Kiuchi stated that Japan has only seen moderate rises in consumer prices, with the pass-through of higher costs from the Middle East conflict remaining limited. He cited the June data showing a 1.7 percent year-on-year increase in the overall consumer price index.

Kiuchi acknowledged the possibility of rising costs being gradually passed onto food and other consumer goods from summer through autumn but emphasized that average real wages are expected to increase nearly 1 percent during the current fiscal year ending in March 2027. He stressed the government's focus on cushioning the hit to households from rising inflation through fuel subsidies.