MNI BRIEF: Japan Aug Core CPI Rises 3.1%, Flat Against July

Japan's annual core consumer inflation rate rose 3.1% y/y in August, unchanged from July’s 3.1%, but above the Bank of Japan’s 2% target for the 17th consecutive month, data released by the Ministry of Internal Affairs and Communications showed on Friday.

August’s core CPI remained above 3% for the 12th consecutive month, although the y/y increase was unchanged despite lower energy prices. The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 4.3% y/y in August, also unchanged from July's 4.3%.

The BOJ board in July revised up the median forecast for core CPI to 2.5% from April’s 1.8%.

The negative contribution from energy items on CPI widened to -0.84 pp in August from -0.74 pp in July. Prices excluding perishables rose 9.2% y/y in August, unchanged from July’s 9.2%. Prices for processed foods, accounting for 15% of the total CPI, which BOJ officials focus on and are sensitive to economic activities, rose 10.3% in August from July’s 10.1%, indicating pass-through of cost increases continued.