BOJ Chief Ueda Says Japan’s Economy in ‘State of Inflation’

The Yomiuri Shimbun

14:07 JST, February 23, 2024

Bank of Japan Gov. Kazuo Ueda told a Diet committee on Thursday that Japan’s economy is in a “state of inflation rather than deflation,” stating the view that prices would continue to rise.

This is the first time for Ueda to have publicly described the price situation as inflationary.

During a session of the House of Representatives’ Budget Committee, Ueda mentioned the outlook for prices, saying, “The trend of [companies] raising prices by passing on higher import costs to consumers has slowed.”

“Service prices have continue to rise moderately with wage increases reflected,” he added.

At a press conference in January, the central bank chief had said that the nation’s economy was now “far away” from deflation.

The BOJ intends to consider ending its negative interest rate policy and other measures, if it can foresee a high rate of wage hikes in this year’s shunto spring wage negotiations, as well as sustained, stable rise in prices to which the wage hikes will be passed on.