Many households are yet to see a wage hike to compensate for the rising cost of living.
Japan saw a fresh 41-year high core consumer inflation in January this year as higher costs of companies were passed on to households, data showed. This kept pressure high on the country’s central bank, which phased out its massive stimulus programme. Core consumer inflation has now exceeded the Bank of Japan’s 2 per cent target for nine straight months.
The nationwide core consumer price index (CPI), excluding volatile fresh food and including energy costs, was 4.2 per cent higher in January than a year earlier, accelerating from a 4 per cent annual gain in December.
Incoming Bank of Japan (BOJ) governor Kazuo Ueda recently told parliament that the central bank must maintain ultra-low rates as the recent acceleration in inflation is driven largely by rising raw import costs, rather than strong demand, a global newswire reported.
“Japan’s trend inflation is likely to rise gradually. But it will take some time for inflation to sustainably and stably achieve the BOJ’s 2 per cent target,” he told a lower house confirmation hearing.
The country’s economy avoided recession in the fourth quarter last year but rebounded much less than expected as business investment slumped.
Fibre2Fashion News Desk (DS)