MNI BRIEF: BOJ's Ueda Warns Of Global Economy Concerns
Bank of Japan Governor Kazuo Ueda said on Monday pent up demand and waning supply-side constraints, which have driven the economic recovery to date, cannot continue for long.
He told business leaders in Osaka City, after these two tailwinds have subsided, U.S. inflation and domestic demand will remain important factors for the Japanese economy for the BOJ to examine.
“[U.S.] inflation rates are still somewhat high relatively to the central bank targets," he said. "It is difficult to predict whether it is possible to maintain economic growth while bringing inflation rates back down to these targets.”
Ueda also warned risk of rapid interest rate hikes negatively impacting the real economy and financial system. remains. “The slowdown in the pace of pick-up in the Chinese economy is also of concern," he said.
On domestic considerations, Ueda said the BOJ will pay close attention to whether moves to increase wages will continue and whether the underpinning of private consumption from the income side will strengthen. "The BOJ must carefully examine the outlook for overseas economies and for a virtuous cycle from company profits and household income spending."