TOKYO: Japanese Finance Minister SUZUKI Shunichi said Friday that the country’s economy is not in a state of deflation.

“Consumer prices are gradually rising recently, and in that respect, the government is of the understanding that our nation’s economy is not in a state of deflation,” Suzuki told a press conference.

The minister expressed hopes over chiefly major companies’ proposals to raise wages at a higher pace than in the previous year in this year’s “shunto” labor-management negotiations. The sharper wage rises are believed to help Japan fully overcome deflation.

“I understand that there is a trend of robust wage increases mainly among large companies,” Suzuki said. “I hope that this trend spreads to small companies, and that wage hikes advance at a rate exceeding those of last year.”

“The government’s current understanding is over the fact that we are not in deflation, not over whether we are seeing inflation or deflation,” he said of the current economy.

The remark came as the Bank of Japan is preparing to scrap its negative interest rate policy at its two-day policy-setting meeting through Tuesday.

“It is up to the BOJ to determine the specific approach of monetary policy and the interpretation of economic and financial conditions behind it,” Suzuki said, after referring to companies’ rosy wage hike pledges in the ongoing shunto and the fact that Japan’s revised real gross domestic product for October-December 2023 showed growth for the first time in two quarters.

JIJI Press