Japan could see inflation remain below the central bank’s 2% target next year if consumption stagnates, moderate policymaker Toyoaki Nakamura said on Thursday, highlighting uncertainty over the timing of further rate hikes.
Nakamura, who is the only one to disagree with the Bank of Japan’s decision to move away from negative interest rates in March, also warned that recent weak signals in consumption and slowing global growth have affected the outlook for the Japanese economy. clouded.
“While resilient, household spending has been sluggish recently as growth in disposable income has been small compared to wage increases,” Nakamura said. “I am not confident that wage increases will be sustainable” as small and medium-sized businesses still need to implement sufficient reforms to boost profits and continue raising wages, he said.
