Japan’s government expects inflation to accelerate in the second half of 2024 but sees current price rises as moderate, per Economy Minister remarks.
Japan’s Economy Minister Minoru Kiuchi stated that the pass-through of rising costs to consumer prices has been limited so far. He noted that June’s overall consumer price index (CPI) data shows only moderate year-on-year price increases, despite ongoing cost pressures.
The government and the Bank of Japan (BoJ) are closely monitoring inflation trends, with both forecasting a pickup in consumer inflation in the latter half of 2024 before a slowdown. Kiuchi emphasized vigilance over potential cost pass-through in food prices during summer and autumn.
Kiuchi refrained from commenting on specific foreign exchange (FX) levels but acknowledged the need to watch the impact of JPY movements on the economy and prices. The BoJ’s monetary policy remains focused on sustainably achieving its 2% inflation target.