Ernie Higa, an entrepreneur who has been in Japan for over 30 years, says Japan’s core consumer price index is approaching the central banks 2% goal.

“When you talk about inflation, it’s kind of like cholesterol – there’s good cholesterol and bad cholesterol – what we’re experiencing now in Japan is bad inflation,” Higa, chairman & CEO at Higa Industries, who is known for bringing the Domino’s Pizza franchise to Japan, told CNBC’s “Squawk Box Asia” on Friday.

According to government data, Tokyo’s core consumer price index, which does not include fresh food or energy, increased 1.9% in May, compared with the same period last year.

Although this figure does not meet the Bank of Japan’s inflation target of 0.9%, the cost rise has been due in large part to rising energy and food prices. In May, Tokyo’s consumer price index was up 0.9% over the previous year.

Higa stated that the Bank of Japan was investigating demand-pull inflation, where the increase in wages will create a “virtuous circle” of consumer spending, which further drives up prices and salaries.

But right now, the country is facing a cost-push inflation — where prices are going up while wages are not following, he added. “As a retailer you’re really squeezed because all of your costs have gone up but you’re not able to really pass on that cost … to the consumer.”

Japan is not alone in experiencing price pressures. Others countries like the U.S. And UKYou are facing perhaps more serious cost-of living issues right now.

The difference, however, is that the Bank of Japan continues to adopt an ultra-dovish monetary policy stance — keeping interest rates relatively low, at a time when peers at the U.S. Federal Reserve and Bank of England have been hiking rates to fight inflation.

This divergence has caused a significant weakening of the policy outlook. Japanese yenThis year has seen the following: currency at one point weakening past the 130 handle against the greenback.

Since then, the yen has strengthened to close to 127 dollars per dollar. This was Friday’s Asian trading session. However, this is still quite a contrast to the levels of around 114 against the greenback earlier in year.

Higa stated that the yen exchange was very important as Japan imports 60% of its food and 99% of its energy. He said that the sharp decline in Japanese currency against the US is leading to an “extremely high cost”.

“If you import food, you can’t even fix your cost, much less then how do you figure out … your selling price,” he said.