BOJ Kuroda Comments:

 Article Source:  https://mainichi.jp/english/articles/20220608/p2g/00m/0bu/002000c

Article:

TOKYO (Kyodo) -- Bank of Japan Governor Haruhiko Kuroda made a rare apology Tuesday for saying at an event the previous day that consumers have become more "tolerant" of price hikes, following criticism that the remark was inappropriate.

"I did not mean that consumers are voluntarily accepting the price increases. I apologize if my words led to a misunderstanding," he told reporters at the prime minister's office.

Kuroda clarified that he made the comments in the context of the "growing need for wage increases" and that he rather felt consumers are "being forced to accept the price hikes as a painful choice."

Ideas:

With no disrespect to Kuroda, sometimes people in positions say things without knowing the consequences of what they say. 

Unfortunately, the media these days jumps on everything someone says to turn it onto a controversy. 

Consumers mostly likely have not become more tolerant but they see prices are rising and are making the necessary adjustments in their spending habits such buying less on something and maybe finding substitutes at a lower price if possible or reducing this or that in their spending habits.

Yes there is the need for increases in wages but the problem is, as always, wages are a cost for businesses and many of these businesses if not all have seen cost increases in energy costs, raw material costs, shipping costs and so and it might not be possible for some or many businesses to increase wages.

But some often say many of the large businsses in Japan are sittin on huge sums of money and the the money is there but businesses are reluctant to use it because of emergencies such as covid which still hasn't passed yet.

Article:

The original remark was made at an event organized by Kyodo News on Monday in reference to a survey conducted by University of Tokyo professor Tsutomu Watanabe, in which more than half of the respondents said a 10 percent price hike on a product they frequently bought would not deter them from buying it from the same store.

"One hypothesis is that being 'forced to save' during behavioral restrictions imposed by the coronavirus pandemic may have led to improvements in consumers' tolerance for price increases," Kuroda had said.

The remark in question was included in notes that the BOJ chief mostly read from during his speech, and the notes were believed to have been prepared in advance by him and his staff.

Ideas:

There could be many reasons for a 10 percent increase might not deter a consumer from buying a produce. Yes, one reason might be an increase in savings for time, another reason might be they really like the product, another reason might be that there aren't any substitutes or alternatives for that product.

And then there is the idea that consusmer price be price inelastic to that product, meaning no matter how much the prices increases they are maybe willing or feel they have no choice and will continue to buy the product.

So, to be fair and honest to Kuroda, the media jumped on something and took it out of context, as the media seems to do a lot. Not just in Japan but everywhere these days.

Even if they were prepared in advance it was just a survey and not his ideas exactly, but the media doesn't care about that, they just want controversy.

Article:

At a House of Councillors panel meeting on finance and monetary affairs on Tuesday, Kuroda also clarified that his comments were made in the context of emphasizing the importance of wage increases.

"I accept the criticism about whether it was appropriate to phrase it as tolerance of price hikes," he said.

Ideas:

So Kuroda, like everyone else had to spin the situation for basically crowd control and the media wants to make him look like the bad guy, because of the BOJ policy of maintaining a low rate policy and not increasing rates like the US and the EU.

Whether he meant it or not, the Japanese consumer, again, might not like the price increases but most likely they do have some acceptance of prices going up and they see and know not just in Japan but globally prices increases are everywhere and its become a temporary way of life for consumers or many consumers. 

So its unfair to blame Kuroda for saying something that may be true but the media doesn't like the idea maybe because they don't like the BOJ's current monetery policies.

Have a nice day and be safe!