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MNI BRIEF: Japan Aug Tokyo Core CPI Rises 2.8% Vs. July 3.0%

(MNI) Tokyo
(MNI) TOKYO

The y/y rise in the Tokyo core inflation rate slowed to 2.8% in Aug from July's 3.0% due to lower energy prices, indicating that the nationwide August core CPI could fall from July's 3.1%, Ministry of Internal Affairs and Communications data showed Friday.

The core-core CPI (excluding fresh food and energy) – a key indicator in the underlying trend of inflation – rose 4.0% y/y in August, unchanged from July's 4.0% and staying at the highest level since April 1982.

The Aug Tokyo core-core CPI fell in line with Bank of Japan board member expectations. They believe upside risk to prices exist and expect Japan’s core CPI will not weaken as much as the bank’s baseline scenario due to ongoing pass-through of cost increases.

The Tokyo core CPI remained above the BOJ's 2% target for 15th straight month in Aug, a sign that corporate pass-through of cost increases continued. Energy prices fell 15.9% in Aug versus the 11.9% drop in July, while foods excluding perishable foods gained 8.9%, down from 9.0% the prior month. Processed food prices, a key BOJ indicator, rose 10.3%, unchanged from July's level, while prices for eating and drinking services rose 6.8% in Aug from 7.1%.

MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com
MNI Tokyo Bureau | +81 90-2175-0040 | hiroshi.inoue@marketnews.com

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