In other words, a nation like Japan, given its rapid aging and low birth rate, may face somewhat limited potential domestic demand compared with other economies that enjoy more favorable  4  BIS central bankers’ speeches  demographics. Thus, the output gap improvement is unlikely to give rise to a rapid pace of wage increases and inflationary pressure compared with other economies.
Moreover, I maintain the view that inflation expectations will rise gradually. Another thing I would like to point out is that, as I have mentioned in the past, a consumption tax hike will have a certain influence on the judgment on underlying price developments.