Japan wants inflation to stoke stability before BOJ governor

On December 23, 2022, people walk past shops in the popular shopping area of Ueno in Tokyo. PHOTO AFP TOKYO Japanese Deputy Chief Cabinet Secretary Seiji Kihara stressed on Sunday the need to achieve an economy where inflation rises stably and sustainably when asked whether the next central bank governor should maintain ultra-low monetary policy.

Kihara said that it is important to create economic conditions where prices rise stably and sustainably.

As the next BOJ governor, the prime minister will choose who he thinks is the most appropriate person, he said. It is important for monetary and macroeconomic policy to be stable. ALSO READ: Japan Inc tries to lure skilled workers as inflation bites.

Kihara said the government was ready to respond flexibly as needed when asked whether additional steps could be taken to cushion the economic blow from rising fuel and raw material costs.

The priority is to raise wages. He said that achieving wage hikes is the best growth strategy for us.

Prime Minister Fumio Kishida's administration has offered subsidies to curb utility and gasoline bills, prodded firms to hike wages, as it saw approval ratings hit by rising fuel and food prices.

The central bank's massive stimulus will likely be phased out soon as inflation perks up well above its 2 percent target, as the choice of a successor to BOJ Governor Haruhiko Kuroda ends in April.