As the COVID-19 pandemic’s affects lessen, Nakagawa anticipates that the third-largest economy in the world will continue to grow, enabling businesses to pass along more of the costs of purchasing raw materials to consumers.
Nakagawa suggested that if businesses have inflated inflation expectations, price increases might quicken. This is one of the “major dangers” to Japan’s price dynamics, in Nakagawa’s opinion.
Nakagawa also observed “high uncertainty” regarding the willingness of businesses, particularly smaller ones, to increase worker wages.
If wage rises are not distributed as anticipated, “inflation could come under downward pressure.”
source: nasdaq.com
