Japan's prime minister (PM) Fumio Kishida stated on Monday that the domestic economy is at a critical juncture to escape from deflation.
Kishida also noted that wage increases at small and medium-sized businesses are essential as they employ 70% of workers in Japan.
The official added that he expects the Japanese private and public sectors will together create the conditions this summer for growth in disposable income that will outpace inflation through wage hikes and income tax cuts.
The PM also emphasised he will work on steps to pass on labour costs to consumers.