The economy will probably keep slowing for now but inflation isn't spreading from commodity-related goods because wage growth is subdued, Bank of Japan Gov. Masaaki Shirakawa said Tuesday.
"Growth will likely remain sluggish for the time being" because of higher energy prices and a cooling global economy, Shirakawa said in a speech in Nagoya. "Second-round effects" of inflation are "unlikely to emerge in the near term," he said.
Prices are rising at the fastest pace in a decade, prompting consumers to cut back as wage growth slows. Signs the world's second-largest economy is entering a recession will probably prompt the BOJ to keep interest rates on hold at least until next year, according to economists surveyed by Bloomberg.