BOJ sees 2% price target nearer with wages key – MNI

Bank of Japan (BOJ) officials see price gains reaching near 2% in the second quarter on higher energy costs and supply-chain disruptions, MNI reports, citing sources familiar with the Japanese central bank’s thinking.

Key takeaways

“With a fiscal stimulus kicking in and the output gap turning positive around mid-2022, BOJ is looking at wages and costlier consumer goods to more pressure.”

“The BOJ has made efforts to narrow the output gap, the difference between actual and potential economic performance, through its easy policy and special measures: buys on corporate and services funding in tandem with the government efforts to spur wage gains, which have lagged.”

“A key test for sustained inflation will be wage negotiations this spring between major firms and workers that can set the tone for smaller companies afterwards.”

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