Japan's economy minister says pass-through of costs limited so far

Japan's Economy Minister Minoru Kiuchi expressed a cautiously optimistic view on inflationary pressures, stating that the impact of rising costs, potentially linked to the Middle East conflict, on consumer goods prices has remained limited.

Kiuchi's assessment aligns with recent economic data, noting that the overall consumer price index saw a moderate year-on-year increase of 1.7% in June. This figure suggests that inflationary risks, while present, have not yet translated into significant price hikes for the general public.

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The overall consumer price index rose 1.7 per cent year-on-year in June, showing only moderate rises.

However, the minister acknowledged the need for continued monitoring. He cautioned that there is a possibility of costs gradually being passed on to consumers, particularly for food and other essential goods, as the season progresses from summer into autumn. This suggests that while current inflation is contained, future price movements warrant close attention.

Kiuchi's remarks were made in response to concerns raised by the Bank of Japan regarding the potential for an inflation overshoot. His comments offer a degree of reassurance regarding the immediate inflationary outlook, while also highlighting the dynamic nature of economic factors and the importance of ongoing vigilance.

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We do need to be vigilant to the possibility that costs could be gradually passed onto food and other consumer goods from summer through autumn.