BOJ’s Nakamura: Says inflation may not reach 2% from FY 2025 on if consumption weakens

Bank of Japan policy board member Nakamura:

• Japan’s economy recovering moderately albeit some weak signs
• My view is that
  inflation may not reach 2% from fiscal 2025 onward if consumption
  weakens
• Will focus on
  whether inflation-adjusted consumption turns positive, in deciding
  future monetary policy
• Based on current
  data, it is appropriate to keep policy intact for time being
• Pass-through of
  wages to inflation remains weak but closely monitoring situation

• Households’ purchasing power is weak, solid rise in disposable income
  is needed for households to boost spending
• Personally not
  confident that wage growth will be sustained
• Want to check
  whether capex growth will become broad-based, as some smaller firms
  appear to be delaying investment due to supply constraints

• Hard to believe companies, which had focused on cost cuts for 30
  years, would suddenly change their mindset in 2 years
• Structural changes
  in economy are necessary for Japan to sustainably, stably achieve BOJ’s 2% inflation target

• Pace of overseas economic recovery slowing, uncertainty remains high
• Japan’s consumption
  has recently been sluggish

I bolded … a lot of the comments. These seem indicative of easy policy remaining in place for the time being.

The BOJ meet next week, June 13 and 14.

This article was written by Eamonn Sheridan at www.forexlive.com.