As the yen exchange rate plummeted, Japanese Prime Minister Kishida Fumio expressed support for Central Bank .
In an interview with the media this week, Fumio Kishida said that the Bank of Japan needs to maintain its policies until wages generally rise, and conveyed support for the current central bank governor Kuroda Haruhiko , excluding the outside world's speculation that the latter may end its term early.
Kishida Fumio said that what Japan currently needs is wage increases, not wage restrictions , and the government will also prepare to take corresponding measures to urge enterprises to raise wages, even if enterprises will pass on the increasing investment costs to consumers:
By passing on the rising prices, we hope that enterprises have a certain amount of room for salary increase.
In the past, salary increase was seen as a cost factor, but looking forward to the future, companies need to invest in talents to promote the development of the economy and the company itself.
Kisha Fumio's remarks are in sharp contrast to the attitude of other developed economies trying their best to curb inflation out of control. At the same time, the yen is also experiencing a turbulent period.
Previously, the Bank of Japan's ultra-loose policy pushed the yen to a 24-year low against the dollar.
Although the Japanese government later took measures such as interfering in the foreign exchange market, it is obvious that the global economic turmoil has not caused the Bank of Japan to change its ultra-loose policies that have been firmly absent in the past decade.
Shortly before Kishida interview, the yen exchange rate against the US dollar fell to 145.60 yen, less than 0.30 yen from the Bank of Japan's intervention level last month.
analysts warn that as long as the interest rate difference between Japan and the United States continues to expand, the previous central bank's efforts to stabilize the yen (which has been spent at present 20 billion US dollars) will be difficult to achieve.
Although Japan also faces the same pressure on energy and food prices soaring as in the United States and Europe, this is partially offset by the long-term contract for Japanese imports of liquefied natural gas , and the rise in prices of other factors has almost not transferred to wage increases, resulting in Japan's current overall inflation rate still maintaining a low of 3%.
Bank believes that the basic consumer demand of the Japanese economy is weak, and some companies, especially small and medium-sized enterprises that employ 70% of the labor force, have been difficult for to pass on higher costs to consumers, which puts pressure on profits and increases the difficulty of their salary increase.
Bank of Japan expects inflation to fall below 2% in the next fiscal year.
Kisha Fumio also said in an interview:
It is difficult to say what level of inflation is suitable.
But I strongly feel that if cannot see wage growth commensurate with price increases, we will not be able to maintain a sustainable economy or protect people's livelihoods.
Some economists believe that after decades of intermittent deflation, Japan may be on the verge of a historic transformation as the global energy crisis forces businesses to raise product prices, creating pressure to push workers to demand salary increases.
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