MNI BRIEF: Japan Jan Core CPI Rises 3.2% Vs. Dec's 3.0%
MNI (TOKYO) - The year-on-year rise of Japan's annual core consumer inflation rate accelerated to 3.2% in January from December’s 3.0%, 10 basis points higher than expected, due to higher energy and food costs excluding perishables, data released by the Ministry of Internal Affairs and Communications showed on Friday.
January’s index stayed above the Bank of Japan’s 2% target for the 34th consecutive month, supporting the BOJ's rate hike stance.
The index was boosted by higher prices of energy (+10.8% vs. +10.1%) and food excluding perishables (5.1% vs. 4.4%).
The phase out of government subsidies aimed at curbing utility bills, and pass-through of high labour and material costs to prices, also drove the increase.
The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 2.5% y/y in January, also accelerating from 2.4% in December.
Services prices, a key BOJ focus, rose 1.4% y/y in January vs. 1.6% in December.
Prices for processed foods, accounting for 15% of the total CPI on which BOJ officials focus and are sensitive to economic activities rose 3.4% in January, accelerating from 2.9% in December.