Japanese Deputy Chief Cabinet Secretary Seiji Kihara has emphasized the importance of an economy in which inflation rises steadily and sustainably.
“What’s important is to create economic conditions where prices rise stably and sustainably,” Kihara said, asked during a TV show if the incoming central bank governor should continue the ultra-easy policies currently in place.
“As for the next BOJ governor, the prime minister will choose who he thinks is the most appropriate person,” he said. It is essential that the monetary and macroeconomic policies be stable.
When asked if extra steps could be done to mitigate the economic impact of rising gasoline and raw material prices, Kihara stated that the government was prepared to “respond flexibly as needed,”
“The priority now is to raise wages. Achieving wage hikes is the best growth strategy for us,” he continued.
The administration of Prime Minister Fumio Kishida has given subsidies to reduce utility and gasoline bills and urged businesses to increase wages in response to falling approval ratings caused by rising food and fuel prices.
Kishida’s selection of a successor to BOJ Governor Haruhiko Kuroda, whose tenure expires in April, is also expected to impact how quickly the central bank could phase out its enormous stimulus as inflation surges well above its target of 2%.