Nakaso also flagged emerging inflationary pressures in Japan. He observed that more companies are raising wages and passing on higher costs through price hikes. Notably, food items, which are frequently purchased by consumers, are rising much faster than headline inflation. This, he warned, could lead to an overshoot in inflation expectations if not monitored carefully.
AP
Recalling his experience during the 2008 financial crisis, Nakaso emphasised the continued importance of global institutions like the BIS and the G7 in managing financial shocks. As chairman of a BIS committee, he helped set up the dollar swap lines that stabilised liquidity after the collapse of Lehman Brothers. He noted that the Federal Reserve will still act as a key provider of dollar funding in times of market stress.
Reuters