© Reuters. FILE PHOTO: Bank of Japan Governor Kazuo Ueda speaks during a group media interview in Tokyo, Japan May 25, 2023. REUTERS/Kim Kyung-Hoon
By Leika Kihara
TOKYO (Reuters) – Bank of Japan Governor Kazuo Ueda said on Friday that the country’s corporate pricing behavior was showing changes that could help push inflation higher than expected.
He also told parliament that the central bank will consider various data when producing its next quarterly growth and inflation forecasts in July.
The BOJ currently expects core consumer inflation to slow below the central bank’s 2% target in the second half of the current fiscal year, Ueda said.
“But there are various uncertainties surrounding the outlook for inflation. What is important is the pricing behavior of companies, which is somewhat above expectations,” he said.
This year’s outcome of annual pay talks between companies and unions has also resulted in big wage increases, Ueda said.
Core consumer inflation in Japan hit 3.4% in April, beating the BOJ’s 2% target for more than a year as companies continue to pass on higher commodity costs to households.