Bank of Japan Sees Broadening Inflationary Pressure and Upgrades Two Regional Economies
The Bank of Japan said on October 8 that price increases driven by higher raw material costs were spreading to consumer goods, with some firms hiking prices more frequently than in the past, signalling concern over broadening inflationary pressure, according to Reuters. The statement followed the central bank's quarterly meeting of regional branch managers.
The BOJ raised its economic assessment for two of the country's nine regions and maintained its view for the rest, saying all were recovering moderately. It also offered an upbeat note on output, saying brisk SI-related demand was increasing domestic production of electronic goods, machinery and telecommunication infrastructure.
Many regions saw firms passing on a broad range of rising costs, the report said, including raw material costs lifted by the Middle East conflict and the weak yen, as well as rising labour costs. Efforts to pass through costs are spreading to firms closer to consumers, leading more companies to raise prices.
The report will feed into the BOJ's quarterly growth and inflation forecasts at this month's policy meeting. The bank raised rates to a 31-year high of 1.25 percent in September. For Chinese households in Japan, spreading price rises mean sticky supermarket and service costs, making the real value of wage settlements worth closer attention.
Published by GSM · USA (original Chinese edition)
Photo: 日本银行总部大楼实景，摄影：Wiiii，CC BY-SA 3.0，来源：Wikimedia Commons（File:Bank of Japan headquarters extension part 2010.jpg）
