MNI BRIEF: Japan Aug Tokyo Core CPI Rises 2.4% Vs. July 2.2%
MNI (TOKYO) - The year-on-year rise in the Tokyo core inflation rate accelerated to 2.4% in August from July’s 2.2%, the fourth straight rise, and remained above 2% for the third consecutive month, data from the Ministry of Internal Affairs and Communications showed on Friday.
Higher energy price (+17.4% vs. +14.5%) drive the increase. The core CPI was within forecasts by Bank of Japan officials who expected inflation to rise as the impact of the pass-through of cost increases continues, although the pace is slowing.
The core-core CPI (excluding fresh food and energy) – a key indicator in the underlying trend of inflation – rose 1.6% y/y in August, also accelerating from July’s 1.5% but stayed below the bank’s 2% target for the fifth straight month.
Tokyo saw processed food prices, a key BOJ focus, rise 2.5% in August, slowing from 2.7% in July, while services prices rose 0.7% in August vs. July’s 0.5%.
Bank officials are focused on corporate price-setting amid higher labor costs ahead of October when many businesses plan to revise their retail prices. (See MNI POLICY: BOJ Set For Sept Pause, Rate Hike Path Intact)