MNI BRIEF: Japan Aug Core CPI Rises 2.8% Vs. July's 2.7%
MNI (TOKYO) - The year-on-year rise of Japan's annual core consumer inflation rate accelerated to 2.8% in August from July’s 2.7% due to higher household durable goods and food excluding perishables, data released by the Ministry of Internal Affairs and Communications showed on Friday.
August’s index stayed above the Bank of Japan’s 2% target for the 29th consecutive month.
Household durable goods rose 7.7% from July's 5.2%, while food excluding perishables increased 2.9% vs. 2.6%.
The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 2.0% y/y in August, also accelerating from July’s 1.9%.
The strong result will increase concern among Bank of Japan officials that the y/y rise in core CPI may not fall as much as expected. Bank officials are carefully examining the upside risk to prices.
Services prices, a key BOJ focus, rose 1.4% y/y in August vs. 1.4% in July. BOJ officials judged that services prices continued to rise steadily as businesses are raising retail prices following wage hikes. They are now focused on October price revisions.
The BOJ board will hand down its latest policy decision later today. (See MNI POLICY: Fed Cut No Obstacle For BOJ Hiking Path)