Japan's Economy Minister Minoru Kiuchi stated that the pass-through of rising costs to consumers has been limited so far, indicating that the overall impact of increased goods costs has not yet been fully reflected in consumer prices [1]. Kiuchi emphasized that both the government and the Bank of Japan (BoJ) are working closely to achieve a sustainable 2% inflation target [1]. According to Kiuchi, the June overall Consumer Price Index (CPI) shows that price rises remain moderate on a year-on-year basis [1].
Kiuchi cautioned that vigilance is needed regarding the potential for cost pass-through on food items, which could occur from summer through autumn [1]. He noted that the government and BoJ share the forecast that consumer inflation will accelerate in the latter half of this year before slowing thereafter [1]. Kiuchi expressed hope that the BoJ will conduct monetary policy appropriately to achieve the 2% inflation target in a stable and sustainable manner, and called for close communication between the BoJ and the government in guiding policy [1].
Regarding foreign exchange, Kiuchi declined to comment on specific FX levels but stated that the government is closely monitoring the impact of FX movements on the economy and prices [1]. There was no immediate reaction in the Japanese Yen following Kiuchi's remarks, with USD/JPY trading near its intraday high at around 157.65 at the time of reporting [1].
CONCLUSION
Japan's Economy Minister Kiuchi highlighted that cost pass-through remains limited, with inflation expected to accelerate later in the year before slowing. The market showed little immediate reaction, and authorities remain focused on achieving stable inflation and monitoring FX impacts.