MNI BRIEF: BOJ Minutes say CPI To Disappoint On Projections

A few Bank of Japan board members said it was unlikely that CPI inflation (excluding food) would sustainably reach 2% within the Bank's projection period that stretches to 2024, minutes of the July 20-21 policy meeting released Wednesday showed.

The member agreed that “the year-on-year rate of change in the CPI (all items less fresh food) was likely to increase toward the end of 2022 due to rises in prices of such items as energy, food, and durable goods,” the minutes showed. (See MNI Brief: BOJ's Kuroda Sees Easy Policy Lifting Demand, Wages).

However, they maintained a cautious view. “The rate of increase was expected to decelerate because the positive contribution of the rise in energy prices to the CPI was likely to wane.”

“Some members said that the increase in consumer prices was mainly attributable to the rise in prices of imported raw materials. On this basis, these members expressed the view that, unless commodity prices continued to rise, the CPI inflation rate was expected to decline from fiscal 2023 onward.”