Japan's August inflation stays above BOJ target for 17th month | Inquirer Business

Japan’s August inflation stays above BOJ target for 17th month

/ 08:03 AM September 22, 2023

People shopping at a market in Tokyo

People shop daily necessities at a market in Tokyo, Japan March 3, 2023. REUTERS/Androniki Christodoulou/File Photo

TOKYO  – Japan’s core inflation was steady in August and stayed above the central bank’s 2 percent target for a 17th straight month, data showed on Friday, a sign of broadening price pressure that could heighten the case for an exit from ultra-easy monetary policy.

The data comes hours before the Bank of Japan (BOJ) concludes its two-day policy meeting that began on Thursday.

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While the BOJ is widely expected to keep ultra-easy monetary settings unchanged, markets are focusing on any hints from Governor Kazuo Ueda on how soon it could phase out stimulus.

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The nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, increased 3.1 percent in August from a year earlier, government data showed, compared with a median market forecast for a 3-percent gain. It followed a 3.1-percent rise in July.

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The so-called “core core” index that strips away the effect of both volatile fresh food and fuel prices, rose 4.3 percent in August from a year earlier, following the same year-on-year pace of increase in July.

Markets are simmering with speculation the BOJ will soon end negative short-term interest rates and a 0 percent cap set for the 10-year bond yield in response to broadening inflationary pressure.

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TAGS: Bank of Japan, Inflation, Japan, monetary policy

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