Kiuchi Downplays Inflation Risks as BOJ Warns of Overshooting Target

Japan's Economy Minister Minoru Kiuchi has downplayed inflation risks, citing the country's moderate consumer price inflation of 1.7% year-on-year in June.

Kiuchi made these comments at a news conference, where he noted that higher energy and shipping costs linked to the Middle East conflict have not yet significantly impacted consumer prices.

However, Kiuchi added a caveat that these costs could filter into food and other everyday items from summer through autumn.

This tone differs from that of the Bank of Japan (BOJ), which has warned that inflation could overshoot its 2% target. The BOJ raised interest rates to a 31-year high of 1% in June, a move that Kiuchi attended and is seen as an advocate for looser monetary policy.

The contrast between the economy minister's comments and the central bank's warning has left investors weighing not only the inflation data but also how much political pressure will shape the BOJ's next moves.