Bank of Japan Governor Kazuo Ueda on Wednesday warned that a temporary energy price shock could become persistent due to impacts on wages and prices.
Speaking at a conference, Ueda noted that the same oil price increase can produce different effects depending on initial economic conditions.
“If inflation expectations are already high and wages are accelerating, the risk of second-round effects is large,” he said.
Ueda’s comments come as rising oil prices from the Middle East conflict add to inflationary pressure in Japan’s economy.
