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Japan Economy Minister says energy-hit inflation remains limited

Kiuchi pointed to CPI rising 1.7% year on year in June, while citing fuel subsidies and expected real wage growth of nearly 1% to cushion households.

Reported · Written up by our desk · Central Banks

Japan’s Economy Minister Minoru Kiuchi said inflation pressures from higher energy prices and the Middle East conflict have not yet translated into broad consumer price gains, offering a more measured view than the Bank of Japan.

Speaking at a press conference Tuesday, Kiuchi said the overall consumer price index rose 1.7% year on year in June, characterizing the current pace of price increases as moderate, and adding that any cost pass through could intensify gradually into food and other goods from summer through autumn.

Kiuchi also highlighted potential buffers for households, forecasting average real wages to rise by nearly 1% in the current fiscal year and pointing to government fuel subsidies as support against higher living costs.

His comments contrasted with the BoJ’s warning from last week that inflation risks could overshoot its 2% goal, and they appeared to temper expectations for a more aggressive policy response while Kiuchi said he hoped the central bank would continue guiding policy to reach its 2% inflation target.

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