MNI BRIEF: Higher Inflation Assessment Hard - BOJ's Uchida

Bank of Japan Deputy Governor Shinichi Uchida said on Wednesday assessing recent price rises is difficult, but longer lasting cost-push factors and earlier than anticipated firm wage- and price-setting behavior were likely key contributors to inflation.

“Until now, the rise in goods prices has been the main driver of the upswing in prices," Uchida told business leaders in Chiba City. "Services for which prices have risen notably are those that use imported raw materials, such as dining-out and home renovations. Of course, neither hypothesis is 100% correct and the answer probably lies somewhat in between the two. My assessment at this point is that signs of change have been seen in firms’ wage- and price-setting behavior."

He also said the BOJ aimed to determine the critical inflection point "where firm behavior that took root during the period of deflation may change, it is necessary to carefully assess the situation by scrutinising information from a micro and a macro perspective.”