Free Trial

MNI BRIEF: Rising Tokyo Inflation Underscores BOJ Challenges

(MNI) Tokyo

Tokyo CPI -- seen as a guide to nationwide CPI published a few weeks later -- rose to a fresh 8-year high in August, further underlining policy and communication challenges for the Bank of Japan.

Tokyo core inflation rate rose 2.6% y/y in August, accelerating from +2.3% in July, recording a12th straight rise month of y/y increases, and is expected to rise further, data from the Ministry of Internal Affairs and Communications showed Friday. In a recent interview with MNI, a former BOJ chief economist told MNI national CPI was likely to peak around 3% early in 2023 (See MNI INTERVIEW2: Kuroda’s BOJ To Hold To Policy Stance - Kameda)

As Kameda notes, the BOJ will likely look through price rises for now, as prices rises are not seen as sustainable over the medium term -- a key to BOJ thinking. However, a continuing pick up in prices in the service sector will be closely watched by policymakers. Prices across the eating and drinking services sector, a metric closely watched by Bank of Japan officials, rose 3.8% y/y in August, up from 3.2% in July.

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

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.