Japan's Economy Minister Warns of Limited Cost Pass-Through Amid Inflation Target Pursuit
Japan's Economy Minister Minoru Kiuchi stated that the impact of rising costs has been limited so far, according to remarks made during the European trading session on Tuesday. The minister noted that both the government and the Bank of Japan (BoJ) are closely working towards achieving a sustainable 2% inflation target.
Kiuchi mentioned that the overall CPI in June showed price rises remaining moderate year-on-year. However, he cautioned that vigilance is necessary to account for the possibility that pass-through costs on food may proceed from summer through autumn.
The government shares with the BoJ a forecast that consumer inflation will accelerate in the latter half of this year and slow thereafter. Kiuchi expressed hope that the BoJ conducts monetary policy appropriately to stably and sustainably achieve its 2% inflation target, also emphasizing the need for close communication between the two entities.
Kiuchi declined to comment on specific FX levels but acknowledged watching closely the impact of FX moves on the economy and prices. At press time, the USD/JPY trades near its intraday high at around 157.65.