TOKYO, May 23 (News On Japan) –
Prime Minister Sanae Takaichi met with Bank of Japan Governor Kazuo Ueda at the Prime Minister’s Office on May 22nd, urging the central bank to implement appropriate monetary policies while taking into account the government’s efforts to combat rising prices and promote crisis-management and growth-related investment.
[embedded content]
Following the meeting, Ueda explained that the talks were part of their regular discussions held every few months, adding that the two exchanged views on the economy, prices, and financial markets in light of the worsening situation in the Middle East. He also said he explained the BOJ’s current approach to monetary policy.
According to Ueda, Takaichi requested that the central bank fully understand the economic measures being advanced by the administration, including policies aimed at easing the burden of inflation on households and supporting strategic investment.
Ueda described the meeting as “a useful exchange of opinions on various issues,” while noting that no specific discussion took place regarding further interest rate hikes.
The meeting came as concerns continue to grow over inflationary pressures linked to instability in the Middle East, with indicators released on May 23rd showing that inflation is once again outpacing wage growth in Japan.
Economists appearing on a television discussion program said the current inflation rate may understate the actual burden facing households because government subsidies on gasoline, electricity, and education costs are temporarily suppressing headline consumer prices.
Professor Takeo Nodo of Keio University of Technology said April’s inflation data, which showed price growth slowing to 1.4%, may not accurately reflect underlying inflation trends because of policies such as gasoline subsidies, free high school tuition programs, and free school lunches.
Nodo warned that inflationary pressure could intensify again later this year as the effects of higher energy prices tied to Middle East tensions spread through the economy. He also pointed to sharp increases in corporate prices, saying those costs are likely to be passed on to consumers over time.
The government plans to subsidize electricity and gas bills from July through September, with support for a standard household expected to amount to roughly 1,000 yen per month. The fiscal 2026 reserve fund budget is scheduled to be approved on May 26th, with additional funding expected to be secured through a supplementary budget.
Some experts questioned whether the current subsidy-focused approach is sustainable, arguing that direct support should instead be concentrated on low- and middle-income households that are suffering most from rising living costs.
Criticism was also raised over gasoline subsidies, with some economists arguing that the policy merely masks higher fuel prices rather than lowering them fundamentally, while also reducing incentives for energy conservation.
Finance Minister Katayama said the government hopes to avoid relying on additional deficit-financing bonds when preparing future supplementary budgets, suggesting unused surplus funds from previous fiscal years may instead be utilized.
Source: FNN
[embedded content]
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: newsonjapan.com
