By Leika Kihara
SAPPORO, Japan (Reuters) – Bank of Japan (BOJ) board member Toyoaki Nakamura said on Thursday that inflation may fall short of the central bank’s 2% target from fiscal 2025 onwards, if consumption weakens and discourages firms from raising prices.
In current projections made in April, the nine-member board’s median forecast is for core consumer inflation to hit 1.9% in both fiscal 2025 and 2026.
“My view is that inflation may not reach 2% from fiscal 2025 onward” if households curb spending and discourage companies from raising prices further, Nakamura said in a speech to business leaders in the northernmost city of Sapporo.
He also said domestic consumption has recently been sluggish and the pace of recovery in overseas growth has slowed.
Nakamura was a sole dissenter to the BOJ’s decision to end eight years of negative interest rates and bond yield control in March.
(Reporting by Leika Kihara; Editing by Kim Coghill)
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