More from BOJ’s Nakamura – Japanese inflation levels are not yet sustainable

Bank of Japan policy board member Toyoaki Nakamura.


BOJ’s Nakamura – says the Bank must patiently maintain powerful monetary easing


usdyen chart 25 August 2022
  • The gap between inflation in Japan and other economies is due largely to slow wage growth
  • Japan must achieve 2% inflation in a sustainable, stable fashion
  • Japan’s economy is not yet in a state where it can achieve the BOJ’s price goal in a sustained, stable fashion
  • There appears to be a shift in long-held mindset in Japan that prices won’t rise much
  • Wage increases are broadening in japan reflecting pick-up in economy
  • Winter bonus payment and next year’s wage negotiation key to whether rise in wages will continue to rise next year and beyond
  • There is a risk fears over resurgence in covid infection cases could weaken pent-up demand, delay recovery in inbound tourism
  • If china re-expands covid curbs, that could prolong supply disruptions and hurt japan’s exports, output and capex
  • Fears are emerging in global markets on whether central banks can balance need to curb inflation, avert recession
  • If such fears heighten sharply, that could tighten global financial conditions, trigger sharp slowdown in overseas economies

Ethan Andrews

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