finance
Bank of Japan Deputy Governor Sees Risk of Inflation Exceeding 2% Target
A Bank of Japan official stated that underlying inflation could rise above the 2% target. The official said delayed adjustments to monetary easing could require faster rate hikes later.
Jun 19, 1:13 AM·1m read1 source
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A Bank of Japan deputy governor said the central bank sees a risk that underlying inflation could accelerate beyond its 2% price stability target. The official told parliament Friday that higher costs are passing through to business-to-business prices at a faster pace and could spread to a wider range of consumer goods and services.
The deputy governor reiterated the bank's plan to continue raising interest rates in line with economic and inflation developments. The official warned that late adjustments to monetary easing could force more rapid rate hikes later, placing added burden on households and businesses through higher mortgage rates.
The yen traded near its weakest level against the dollar since 1986 at around 161.20 per dollar on Friday morning. The deputy governor said currency movements are now more likely to affect inflation and require closer monitoring, including developments in the Middle East and global AI-related demand.
The official added that Middle East conflict has raised energy and oil-related transaction costs that could begin boosting consumer inflation around summer.
