Economic Indicators

Core inflation in Japan’s capital accelerates to 2.7% in Oct


FILE PHOTO: A woman looks at items at a shop in Tokyo, Japan, March 24, 2023. REUTERS/Androniki Christodoulou/File Photo

By Takahiko Wada and Leika Kihara

TOKYO (Reuters) – Core consumer inflation in Japan’s capital Tokyo, considered a leading indicator of nationwide trends, hit 2.7% in October, data showed on Friday, accelerating from the previous month in a sign of broadening price pressures.

The year-on-year increase in the core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, compared with a median market forecast for a 2.5% gain. It was faster than a 2.5% rise in September.

The so-called “core core” index, which strips away both fresh food and fuel prices, was up 3.8% in October from a year earlier, government data showed.

The data is likely among factors the Bank of Japan (BOJ) will scrutinise at next week’s policy meeting, when the board produces fresh quarterly growth and inflation forecasts.

The BOJ remains a global dovish outlier, having maintained ultra-loose policy even as major central banks elsewhere raised interest rates aggressively to fight rampant inflation.

While inflation has exceeded its 2% inflation target for more than a year, the BOJ has pledged to keep ultra-low interest rates until the recent cost-driven price rises shift to a more durable increase driven by domestic demand.

Source

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