Japan's annual core consumer price index quickened to 2.8% y/y, with the acceleration from 2.4% in July and rise to the highest level since October 2014 falling in-line with expectations of Bank of Japan officials.
August’s rise, excluding the impact of sales tax hike, was the highest since September 1991 when it rose 2.8%, according to data released by the Ministry of Internal Affairs and Communications on Tuesday. It was the 12th straight rise, boosted by higher prices of food, excluding perishables, and energy.
The core CPI is expected to rise to 3% or higher in the coming months but it will not prompt policy adjustments by the BOJ as bank officials expect the year-on-year rise to slow in fiscal 2023.
The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 1.6% y/y in August, up from July’s 1.2%.
The positive contribution from energy item rose to 1.27 pp in August from 1.22 pp in July and the positive contribution from food excluding perishables rose to 0.92 pp in August from 0.83 pp in July.