The BOJ says that fuel and food prices will keep rising in Japan, which will help keep inflation in check.
The BOJ says that the price of gasoline and food will keep going up, which will keep the inflation rate in Japan going up.
Tokyo (Reuters) – Japan’s consumer inflation will remain elevated later this year as a result of increasing power and food costs, as the recent spike in commodity prices has a delayed effect on the economy, the central bank warned on Monday.
Because Japanese utilities base their power rates on the average import cost many months in advance, the Bank of Japan (BOJ) stated that the upward pressure from growing energy prices would continue to support consumer inflation in the second half of the fiscal year started in April.
Recent increases in input costs may also contribute to future increases in food prices as more businesses pass on expenses to consumers, the BOJ said in the full edition of its quarterly outlook report.
In March, Japan’s core consumer prices rose at the fastest rate in more than two years, which sparked fears that rising energy and food prices would keep hurting families’ spending power.
According to a summary of the study issued on Thursday, the central bank raised its inflation projection for this fiscal year but said prices will decline the next year as the effect of recent fuel price increases dissipates.
