BOJ’s Noguchi Navigates Japan’s Inflationary Shift Amid Global Headwinds

Monetary Policy and Economic Outlook - Bank of Japan (BOJ) board member Asahi Noguchi indicates a heightened need to adjust the policy rate as Japan moves closer to its 2% inflation target, signaling a new phase for monetary policy [2][9] - Inflation expectations are slowly converging on 2%, driven by shifts in corporate price and wage-setting behavior and growing corporate profits facilitating cost pass-through to prices [3][9] - Despite ongoing inflation, there is a slowing rise in import prices, which could lead to slower consumer inflation [4] Labor Market and External Risks - The labor market is near full employment and the output gap is close to zero, but there are concerns over potential downside risks stemming from U.S. tariff policy [3][9] - Noguchi emphasizes the need for a flexible policy approach to address evolving risks, particularly those that could delay real wage growth [3] Corporate Developments - Deutsche Lufthansa (DLAKF) has set ambitious financial targets for 2028–2030, aiming for a significant profitability boost and a global workforce reduction of approximately 4,000 jobs [5][9] - The airline plans to modernize its fleet with over 230 new aircraft as part of its strategy [5]