Latest news with #economiccouncil
Reuters
6 days ago
- Business
- Reuters
BOJ may be behind the curve on inflation risk, government council member says
TOKYO, Aug 7 (Reuters) - The Bank of Japan may be behind the curve in dealing with the risk of high inflation, one private sector member of the government's top economic council was quoted as saying on Thursday. "In the past, we used to debate whether inflation would reach the BOJ's 2% inflation target or not. But now, inflation is above 2%," the member told a meeting of the council, according to a government official who attended the meeting and briefed reporters. "I'm worried that monetary policy is already behind the curve," the member was quoted as saying, adding that prolonged price rises were already affecting people's livelihood and their inflation expectations. Another private sector member said Japan must now undertake policies to stabilise inflation around 2% unlike in the past, when it focused on accelerating price growth to that level. "I respect the projections made by the BOJ and Cabinet Office that inflation will eventually stabilise and slow below 2%. But elevated inflation affects the public by pushing down real wages," the member was quoted as saying. The remarks underscore a growing concern held by business and academic circles over persistent price rises, which have kept inflation above the BOJ's 2% target for over three years. The BOJ exited a decade-long stimulus last year and raised its short-term policy rate to 0.5% in January, based on the view Japan was on the cusp of durably achieving its 2% inflation target. But it has held rates steady since then and signalled its intention to tread carefully in raising borrowing costs, on the view that recent inflation was driven largely by supply shocks, rather than robust demand. The government's top economic council consists of the prime minister and key cabinet ministers such as the finance minister, as well as BOJ Governor Kazuo Ueda. There are also four private sector members including Takeshi Niinami, head of beverage maker Suntory Holdings, and BNP Paribas strategist Mana Nakazora.
Yahoo
6 days ago
- Business
- Yahoo
Japan cuts growth forecast on US tariffs drag, weaker consumption
By Makiko Yamazaki TOKYO (Reuters) -Japan's government cut its growth forecast for this fiscal year on Thursday as U.S. tariffs slow capital expenditure and persistent inflation weighs on private consumption, threatening a fragile economic recovery. In revised estimates presented at a meeting of Japan's top economic council, the government cut its inflation-adjusted gross domestic product growth forecast for the year ending in March 2026 to 0.7% from 1.2% projected in January. The new forecast, still above private-sector forecasts for 0.5% growth, reflects worries that U.S. tariffs will make Japanese companies more cautious about capital expenditures and drag down exports, both key drivers of Japan's economic growth. The outlook for private consumption, which accounts for more than half of Japan's economy, was also lowered as inflation continues to squeeze households. The private-sector members of the economic council warned that inflation could further dampen consumer spending if it accelerates. "The Bank of Japan should pursue its price stability mission and sustainably and stably meet it's 2% inflation target," the members said. For the next fiscal year from April, the government projected growth to pick up slightly to 0.9%, retaining its view the economy will sustain a domestic demand-led recovery as it predicts wage growth will outpace inflation and boost private consumption. The government maintained its outlook for delivering a primary budget surplus in fiscal 2026 for the first time in decades, predicting even a larger surplus of 3.6 trillion yen ($24.39 billion) thanks to higher tax revenues. The primary budget balance, which excludes new bond sales and debt-servicing costs, is a key gauge of the extent to which policy measures can be funded without resorting to debt. But the rosy outlook has not factored in potential tax cuts and cash handouts that the government has been considering amid growing pressure from the opposition for more aggressive spending to ease rising living costs. Prime Minister Shigeru Ishiba's grip on power has been further weakened by a bruising defeat for his ruling coalition this month in upper house elections after having lost its lower house majority last October. ($1 = 147.5900 yen)
Reuters
6 days ago
- Business
- Reuters
Japan cuts growth forecast on US tariffs drag, weaker consumption
TOKYO, Aug 7 (Reuters) - Japan's government cut its growth forecast for this fiscal year on Thursday as U.S. tariffs slow capital expenditure and persistent inflation weighs on private consumption, threatening a fragile economic recovery. In revised estimates presented at a meeting of Japan's top economic council, the government cut its inflation-adjusted gross domestic product growth forecast for the year ending in March 2026 to 0.7% from 1.2% projected in January. The new forecast, still above private-sector forecasts for 0.5% growth, reflects worries that U.S. tariffs will make Japanese companies more cautious about capital expenditures and drag down exports, both key drivers of Japan's economic growth. The outlook for private consumption, which accounts for more than half of Japan's economy, was also lowered as inflation continues to squeeze households. The private-sector members of the economic council warned that inflation could further dampen consumer spending if it accelerates. "The Bank of Japan should pursue its price stability mission and sustainably and stably meet it's 2% inflation target," the members said. For the next fiscal year from April, the government projected growth to pick up slightly to 0.9%, retaining its view the economy will sustain a domestic demand-led recovery as it predicts wage growth will outpace inflation and boost private consumption. The government maintained its outlook for delivering a primary budget surplus in fiscal 2026 for the first time in decades, predicting even a larger surplus of 3.6 trillion yen ($24.39 billion) thanks to higher tax revenues. The primary budget balance, which excludes new bond sales and debt-servicing costs, is a key gauge of the extent to which policy measures can be funded without resorting to debt. But the rosy outlook has not factored in potential tax cuts and cash handouts that the government has been considering amid growing pressure from the opposition for more aggressive spending to ease rising living costs. Prime Minister Shigeru Ishiba's grip on power has been further weakened by a bruising defeat for his ruling coalition this month in upper house elections after having lost its lower house majority last October. ($1 = 147.5900 yen)
Arab News
18-06-2025
- Politics
- Arab News
German minister to Iran: never too late to negotiate
BERLIN: Germany's foreign minister appealed to Iran's leaders to make credible assurances that it is not seeking a nuclear weapon and to show it is willing to find a negotiated solution as fears mount of further military escalation between Iran and Israel. 'We are still ready to negotiate a solution. However, Iran must act urgently ... it is never too late to come to the negotiating table if one comes with sincere intentions,' Johann Wadephul said at a news conference with his Jordanian counterpart on Wednesday. Wadephul said Israel's fear that Iran would develop nuclear weapons was justified and it had a right to self-defense. 'The Israeli decision to do something against this threat is comprehensible,' he said, adding civilian deaths on both sides were regrettable after air attacks between Iran and Israel. His ministry was arranging special flights later on Wednesday and on Thursday to each repatriate about 180 German citizens via Amman, he said. Wadephul also said Germany had agreed to create an economic council with Syria to improve cooperation and boost prosperity and stability there.
