Japan advisors urge focus on sustaining growth after inflation hits BOJ goal
EWJ•Private-sector members of Japan’s top economic panel said reaching the Bank of Japan’s 2% inflation target is not an end in itself, calling for higher incomes and productivity to sustain growth. Core consumer prices rose 2.1% year over year in September.
1. Growth beyond inflation
Four private-sector members of Japan’s Council on Economic and Fiscal Policy said reaching the Bank of Japan’s 2% inflation target is not an end in itself. They said a lasting exit from deflation requires sustained increases in real incomes and productivity, noting that private consumption remains weak and improvements in real incomes and long-term growth expectations have yet to be fully realised.
2. Risks and coordination
The members cited energy prices, financial market conditions and AI-related investment as risks policymakers should monitor. The BOJ has flagged the need to continue raising interest rates to guard against upside price risks and prevent underlying inflation from overshooting its target. Japan’s core consumer price index rose 2.1% year over year in September, while the government has not officially declared victory over deflation.
