Himino: BOJ must scrutinize newly emerging factors that are pushing up prices

<ul><li>Recent rises in Japan's CPI are more more modest than in the US and Europe but stronger than previously expected</li><li>While pass-through of import prices rise is broadening, new factors like labour shortages and strong domestic demand may also be playing a part</li><li>Pass through of import price rise still dominant factor but BOJ must scrutinize contribution of newly emerging factors that are pushing up prices</li><li> Not seeings signs of risk Japan would experience too-high inflation, must look at various factors</li><li>Must be vigilant to signals coming out from markets, and impact of market moves on Japan's economy</li></ul><p>There's plenty of 'inflation is transitory' thinking in Japan right now but there's an extremely strong argument to ease out of YCC on a risk-management approach from where I stand. The July BOJ meeting will be interesting.</p>

This article was written by Adam Button at www.forexlive.com.