Japan advisers say inflation goal must lead to higher real incomes

Private-sector members of Japan's top economic council said reaching the central bank's 2% inflation target was not an end in itself. Sustained gains in real incomes and productivity were needed for a lasting departure from deflation, they said.

The four experts said consumption remained weak and improvements in incomes and long-term growth expectations were incomplete. They urged policymakers to watch energy prices, financial conditions and AI investment risks.

Prime Minister Sanae Takaichi said people needed to feel the benefits of growth. The Bank of Japan has signalled further interest-rate rises, but the government has not formally declared deflation defeated because it wants clearer evidence that persistent price declines will not return.