Bank of Japan Governor Haruhiko Kuroda said on Wednesday that the global surge in inflation is among the current challenges being faced by central banks, reported Reuters. In Japan, he continued, pent-up household demand has been limited and the recovery of aggregate demand has been slower than in Europe and the US. Meanwhile, wages in Japan have risen, but the rate of increase has remained moderate. 

The appropriate monetary policy response to inflation will differ between countries, he continued, though a common challenge for each country is to determine the magnitude and persistence of inflationary pressures. Uncertainties over geopolitical risks are extremely high, Kuroda noted, and could put downwards pressure on the global economy by shrinking trade and damaging confidence.