Bernstein sees TI’s likely price hike benefiting Infineon, Renesas stock
Investing.com-- Bank of Japan Governor Kazuo Ueda said on Tuesday that the central bank needed to be more vigilant on food inflation increases, especially with inflation at its closest to the BOJ’s annual target in 30 years.
Ueda also reiterated that the BOJ was prepared to hike interest rates further if the Japanese economy continued to pick up.
“Our baseline view is that the effects of food price inflation are expected to wane," BOJ said at a BOJ conference, according to comments carried by Reuters. “However, given that underlying inflation is closer to 2% than a few years ago, we need to be careful about how food price inflation will impact underlying inflation.”
Ueda said that increases in underlying inflation were driven not only by an economic recovery from the pandemic and labor market tightness, but also by supply shocks amid disruptions in global trade.
Ueda’s comments come after data last week showed Japanese core consumer inflation rose to an over two-year high in April. A recent round of strong wage hikes are also expected to boost inflation.
Analysts said sticky inflation increased the odds that the BOJ will raise interest rates in July. The central bank had last year ended nearly a decade of ultra-loose monetary policy, and has so far hiked interest rates thrice.