TOKYO (Reuters) -Japanese Prime Minister Sanae Takaichi said on Wednesday she “strongly hopes” the central bank conducts monetary policy to stably achieve its 2% inflation target driven by wage increases, rather than rising raw material costs.
“Consumer inflation is currently around 3% but the main reason is rising rice and food prices. Such price rises hurt people’s livelihood and could weigh on the economy,” Takaichi told parliament.
Japan still faced the risk of returning to deflation, which would prompt households to hold off spending, hurt corporate profits and discourage firms from raising wages, she said.
The government must thus focus on achieving moderate inflation accompanied by wage increases, Takaichi said, adding that the type of inflation Japan was seeing now was “not good.”
“This is a matter that affects monetary policy in a big way, so we hope to coordinate closely with the Bank of Japan,” she said.
(Reporting by Leika Kihara; Editing by Jacqueline Wong and Kim Coghill)
