Bank of Japan Governor: Rising oil prices are a test for the entire inflation system.

Bank of Japan Governor Haruhiko Kuroda stated that the impact of oil prices is not just limited to oil prices, but also tests the entire inflation system. Speaking at the opening ceremony of a two-day international conference in Tokyo on Wednesday, Kuroda said that the initial economic conditions are crucial when oil price shocks occur. The world is facing its fifth oil price shock. If inflation expectations are already high, the risk of a second-round effect is also high. If expectations are very low and wages remain stagnant, even a huge cost shock may not push up underlying inflation.