By Leika Kihara

TOKYO (Reuters). -China’s zero-COVID restrictions may slow world growth, prolong supply disruptions, and increase inflationary pressures. This was according to a Bank of Japan policymaker. He also warned of the wider fallout of rising Omicron variant cases.

Toyoaki Nakamura, another board member, said that the BOJ should not tighten monetary policies because inflation and wage growth are still subdued in relation to other economies.

Nakamura said at a news conference that “I don’t think the conditions are in place for Japan to alter monetary policy.”

On Wednesday, he stated that raising interest rates before wage growth is apparent would mean companies losing money which could be used to increase pay.

Nakamura was a Hitachi executive who worked for Hitachi Ltd (OTC:) Ltd. He said disruptions in supply chains won’t go away easily because China – the world’s largest manufacturer – keeps strict controls on economic activity.

He said that China’s “zero-COVID” policy in the face of Omicron infection could have a negative impact on global economic growth and prolong global supply chain disruptions.

This comment follows Kristalina Georgieva, head of the International Monetary Fund, warning that China must reevaluate its zero COVID response to pandemic.

Nakamura explained that semiconductor chips would likely be scarce throughout the year.

Japan’s long term interest rates have risen on speculation by the market that the BOJ might follow other central banks who are executing or hoping to increase their rates.

Nakamura explained that although global commodity and fuel inflation are pushing up some Japan’s goods prices, the cost-push inflation won’t last unless it is accompanied by increased wages.

It is not clear how quickly the companies will be able to pass rising raw material prices on to consumers, he stated.

Nakamura declared, “We will patiently continue our ultra-easy monetary policy until wages rise steadily.”

Japan is not immune from the effects of rising commodity prices, with record-breaking wholesale inflation. Core consumer prices increased 0.5% in December compared to a year ago, which is well below the BOJ’s target of 2%. Slow wage growth has weighed on consumption and deterred firms from increasing prices.