Bank of Japan (BOJ) Governor Kazuo Ueda said central banks should not look at oil prices in isolation.
"A temporary energy shock can become persistent if it feeds into wages, expectations, and price-setting behavior," Ueda warned.
Comparing past energy shocks in Japan, he noted that the same oil price increase can have different effects depending on initial conditions.
"If inflation expectations are already high and wages are accelerating, the risk of second-round effects is large," Ueda said.
