MNI BRIEF:BOJ Amamiya Warns On Spending, Overseas Econ, Prices

Bank of Japan Deputy Governor Masayoshi Amamiya on Thursday warned of downside risk to economy and he is particularly focused on the sustainability of private consumption and overseas economic activity and prices.

“For a sustained increase in private consumption, it is necessary that wages rise,” Amamiya told business leaders in Morioka City, (See: MNI BRIEF: BOJ Amamiya: Must Keep Easy Policy Amid Uncertainty).

“In this regards, if, for example, prices of commodities, including gains, remain high for a prolonged period amid high uncertainties over the situation surrounding Ukraine, wage increase will not sufficiently catch up with overall price rises and Japan’s economy could be pushed down, particularly for private consumption,” Amamiya said.

“There is a risk that global financial conditions will tighten further through adjustments in asset prices, fluctuations in foreign exchange markets, and capital outflows from emerging economies, and that will eventually push down overseas economies.”

Amamiya also said, “The BOJ considers it necessary to continue to pay due attention to developments in financial and foreign exchange markets and their impact on Japan’s economic activity and prices.”