Japan's Economy Minister Plays Down Inflation Risks

Japan's economy minister, Minoru Kiuchi, expressed a relatively optimistic view on inflation risks in the country. According to him, consumer prices have only seen moderate rises so far, with a year-on-year increase of 1.7% in June.

Kiuchi acknowledged that there is a possibility that higher costs from the Middle East conflict could be gradually passed onto food and other consumer goods from summer through autumn. However, he emphasized that average real wages are expected to increase nearly 1% during the current fiscal year ending in March 2027.

The minister stressed that the government's focus is on cushioning the hit to households from rising inflation through fuel subsidies. He also expressed support for the Bank of Japan's (BOJ) efforts to achieve its 2% inflation target, saying 'We hope the BOJ continues to guide appropriate policy to stably and sustainably achieve its 2% inflation target.'