MNI 5 THINGS: June Tokyo CPI Rise Accelerates on Energy Costs

     TOKYO (MNI) - Core consumer price index in central Tokyo, a leading

indicator of the national average inflation rate, rose 0.7% on year in June,

accelerating from +0.5% in May, as higher gasoline and utility  costs continued

to offset lower mobile communications fees, data from the Ministry of Internal

Affairs and Communications released Friday showed.

     This indicates the year-over-year rise in the national CPI may also

accelerate in June from the 0.7% rise in May in data due on July 20.

     The key points from the latest Tokyo CPI data:

     * The Tokyo core consumer price index (excluding fresh food) rose 0.7% on

year in June, coming in slightly firmer than the MNI median economist forecast

for +0.6%. It was the 12th straight y/y rise and the pace of increase

accelerated from +0.5% in May and +0.6% in April but was still below the recent

peak of +0.9% in February.

     * The June Tokyo CPI was pushed up by a 11.7% y/y rise in the prices for

overseas holiday tours (vs. +5.6% in May) and 2.1% rise in accommodations costs

(vs. -1.8% in May). It was also supported by higher energy costs (+5.8% in June

vs. +5.2% in May).

     * Retail price hikes have gradually spread in light of labor shortages and

higher materials costs but the move has been slow amid sluggish growth in real

wages.

     * The core-core CPI (excluding fresh food and energy) -- a key indicator of

the underlying trend of inflation -- rose 0.4% on year in June in Tokyo, also

accelerating from +0.2% in May and +0.3% in April.

     * The prices of goods excluding volatile fresh food rose 1.0% on year in

June, with the pace of increase accelerating from +0.8% in May. The year-on-year

rise in service prices also rose to +0.5% in June from +0.3% in May.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com

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