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Japan shifting to wage-driven inflation phase, finance minister says

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In short

Japan is moving towards a wage-driven inflation phase, with the government planning to cut consumption taxes and provide payouts to households to address rising living costs.

Key points

  • The government is taking steps to cushion the impact of rising living costs.: The government is taking steps to cushion the impact of rising living costs.
  • The government and the Bank of Japan do not see conflict between their inflation views.: The government and the Bank of Japan do not see conflict between their inflation views.

Sources checked by our analysis pipeline: 1

TOKYO, Oct 21 : Japan's economy is seeing price rises driven by higher import costs and on the cusp of shifting to a period of sustained inflation driven by rising wages, Finance Minister Satsuki Katayama said on Wednesday.

The government's scheduled consumption tax cut and payouts are aimed at cushioning the blow to households from rising living costs, Katayama told parliament.

"We are exchanging views with the Bank of Japan on various fronts. I see no gap between the view of the government and that of the BOJ," Katayama said when asked by a lawmaker whether the government's tax cut plan could conflict with the central bank's efforts to combat inflation with interest rate hikes.

Original source: www.channelnewsasia.com

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