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Kishida, Bank of Japan Differ On Measures To Control Surging Prices
- By The Financial District
- Nov 2, 2022
- 2 min read
Prime Minister Fumio Kishida and Bank of Japan Governor Haruhiko Kuroda agree on the need for wage increases to match a recent surge in consumer prices but seem to be at odds on other economic policy areas, Shinya Tokushima and Satoshi Kimura reported for Asahi Shimbun.
Photo Insert: In other important respects, Kuroda and Kishida were announcing measures in direct conflict with each other.
“What we must place top priority on is wage increases in line with the rise in consumer prices,” Kishida said at an Oct. 28 news conference where he outlined the details of his administration’s economic package.
He stated that the annual spring offensive for wage levels between labor and management next year would be decisive in determining if the Japanese economy can enter a positive spiral of economic growth and distribution of benefits.
On the same day at his own news conference following a BOJ policy meeting, Kuroda was asked about the central bank’s projection for fiscal 2022 of a 2.9-percent consumer inflation rate.
“The consumer price increase is not a sustainable one that has been accompanied by wage increases,” Kuroda replied.
He said the BOJ would stick with its loose monetary policy because the domestic economy was still partly on its way to recovery even though the inflation rate projection exceeds the central bank’s own 2-percent goal.
But in other important respects, Kuroda and Kishida were announcing measures in direct conflict with each other.
The ultra-loose monetary policy of the BOJ is considered the primary factor behind the plunging of the yen against the dollar as other central banks raise their interest rates. That has contributed to raising the cost of imported food products.
Kishida was forced to announce the economic package to help counter the negative effects of the weak yen on surging consumer prices. While acknowledging the difficulty of suddenly hiking interest rates in Japan, government officials have also increasingly been critical of what Kuroda has been saying.
