cost-push

BOJ Governor Kazuo Ueda has said inflation has been driven mostly by cost-push factors and must shift to a more demand-driven rise in prices backed by higher wages for the bank to consider normalising its ultra-loose monetary policy.

However, the BOJ has brushed aside such speculation, saying that the current global cost-push inflation is not sustainable.

"It's true the recent cost-push inflation is lowering real income, hurting households and adding burdens to some smaller firms," Ueda said.

The BOJ has said such cost-push inflation will dissipate, and must be replaced by price rises driven more by robust domestic demand in order for it to consider ending ultra-low interest rates.

But the BOJ has said the recent cost-push inflation must be replaced by price rises driven more by robust domestic demand, and accompanied by wage growth, in order for it to consider ending ultra-low interest rates.