By Leika Kihara
TOKYO (Reuters) -Japanese Prime Minister Sanae Takaichi said on Tuesday the country has yet to achieve sustainable inflation accompanied by wage gains, signaling her preference for the central bank to go slow in raising interest rates.
While consumer inflation continues to hover around 3% due to rising food costs, Japan is still “half way” in achieving sustainable and stable price growth backed by solid wage gains, Takaichi said.
“I hope the Bank of Japan conducts appropriate monetary policy towards sustainably and stably achieving its 2% inflation target,” she told parliament.
Her remarks came in response to grilling by Yoshihiko Noda, head of the largest opposition party and former prime minister, who said preventing the BOJ from raising interest rates could push up import costs and broader inflation by weakening the yen.
Takaichi also said her administration will “strategically” deploy fiscal spending to increase household income, improve consumer sentiment and strengthen the economy.
The BOJ ended a massive, decade-long stimulus last year and raised short-term interest rates to 0.5% in January on the view Japan was on the cusp of sustainably achieving its 2% inflation target.
But it has kept rates steady since then to ensure Japan makes further progress in durably hitting its price goal backed by solid wage gains.
(Reporting by Leika Kihara; Editing by Jacqueline Wong and Sam Holmes)
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