Asia

BOJ Kuroda defends remark on households' acceptance of price hikes

FILE PHOTO: Bank of Japan (BOJ) Governor Haruhiko Kuroda attends a news conference at the BOJ headquarters in Tokyo, Japan July 30, 2019. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) -Bank of Japan Governor Haruhiko Kuroda on Tuesday defended his remark a day earlier that households were becoming more accepting of price hikes, saying it was made in the context of explaining the need for wages to rise more.

“We aren’t just aiming to raise prices. We instead want to create a positive cycle where prices rise in tandem with stronger wage growth and economic activity,” he told parliament.

“I made the comment in the context of explaining the importance of increasing wages,” Kuroda said, adding that the central bank will scrutinise various surveys to gauge household sentiment and perceptions on price moves.

Kuroda drew a flurry of criticism on social media for his comments on Monday as being out of touch with households suffering from rising living costs.

“It deviates somewhat from reality,” Japan’s Trade Minister Koichi Hagiuda was quoted by Kyodo news agency as telling reporters, when asked about Kuroda’s comments.

Kuroda’s comments come at a sensitive time for Prime Minister Fumio Kishida’s administration, which faces growing calls to deal with rising fuel and food costs ahead of an upper house election next month.

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