Many Bank of Japan policymakers said rising global commodity costs will gradually push up the country’s inflation, though some warned that weak consumption will keep any upward pressure modest, minutes of their June meeting showed on Wednesday.
Some in the nine-member board also cautioned that rising prices of various goods, while driven largely by robust global demand, could push up costs for companies and drag on Japan’s economy, the minutes showed.
“Many members said domestic wholesale inflation is rising reflecting global commodity price hikes, which could push up consumer prices down the road,” the minutes showed.
One member said Japan’s consumer inflation could accelerate in the latter half of this year as demand recovers from the pandemic’s initial hit, according to the minutes.
But others warned that slow wage growth and Japan’s sticky deflationary mindset could moderate such inflationary pressures, the minutes showed.
“Prices for various goods are rising. If this persists and companies fail to pass on the higher costs, that could worsen Japan’s terms of trade, and weigh on the economic and price outlook,” a few members were quoted as saying.
At the June meeting, the BOJ kept monetary policy steady and unveiled a plan to create a new scheme to boost funding for activities aimed at combating climate change.
One member said the central bank must consider various ideas on how it could help Japan’s economy make a smooth transition towards a post-pandemic world, the minutes showed.
Reporting by Leika KiharaEditing by Chang-Ran Kim; Reuters