MNI BRIEF: Japan’s Cost-Push Inflation To Tail Off - Ueda

Bank of Japan Governor Kazuo Ueda said on Wednesday that Japan’s high inflation rate caused by cost-push will peak and then tail off.

Ueda told lawmakers, however, that he does not rule out the risk Japan’s inflation rate rises again due to a weak yen, but the possibility is low. When asked about the impact of rate hikes on fiscal conditions, Ueda said the conduct of the BOJ’s monetary policy will not be driven by considerations about increased interest payments imposed on government debt.

He added that the BOJ’s easy policy is aimed at achieving the price stability target, not at supporting government’s financing. Ueda also said maintaining confidence in fiscal conditions was important.

Japan's trimmed mean underlying inflation accelerated to 2.9% y/y in March, up from February's 2.7%, as cost increase pass-throughs continue, data released by the Bank of Japan on Tuesday showed (see: MNI BRIEF: Japan Trimmed Mean Inflation Rises To 2.9% - BOJ).