Japan inflation accelerates to 2.7% in July

Akihabara in Tokyo, Japan is known for its arcade games, tech shops and stores for anime and manga lovers. | Photo by JMS

Tokyo, Japan — Japanese inflation was slightly higher in July, with prices rising 2.7 percent on-year compared with 2.6 percent the month before, internal affairs ministry data showed Friday.

The core Consumer Price Index reading, which excludes volatile fresh food prices, was in line with market expectations.

Increases in the cost of electricity and gas, processed food and car insurance premiums were among the areas contributing to the uptick, the ministry said in a statement.

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While price increases at the petrol pump slowed, that was offset by rising electricity and natural gas fees, the ministry added.

Excluding fresh food and energy, Japanese prices rose 1.9 percent in July — also in line with expectations — following a 2.2 percent rise in June.

The data comes after the Bank of Japan’s deputy governor earlier this month said officials would stick to their ultra-loose monetary policies given market volatility.

The key Nikkei 225 index surged more than 10 percent on August 6, a day after tanking more than 12 percent on concerns about a possible US recession and the stronger yen.

The BoJ late last month hiked interest rates for only the second time in 17 years — indicating plans for more if the economy performs as officials expect.