MNI BRIEF: Japan Oct Tokyo Core CPI Rise 2.7% Vs. Sept 2.5%

The y/y rise in the Tokyo core inflation rate accelerated to 2.7% in October from September’s 2.5% due to slower negative contributions from energy and solid food prices excluding perishable food, for the first rise in four months, data from the Ministry of Internal Affairs and Communications showed on Friday.

The data indicated the nationwide October CPI read will likely rise from September’s 2.8% and increase the chance that the Bank of Japan board will revise up its median inflation view this fiscal year from July’s 2.5% to circa 3%.

The core-core CPI (excluding fresh food and energy) -- a key indicator in the underlying trend of inflation -- rose 3.8% y/y in October, slowing from September's revised 3.9%, but above the bank's 2% target for the 17th straight month. The October Tokyo core CPI remained stubborn and in line with the BOJ view that Japan’s core CPI will not weaken as much as the bank’s baseline scenario in the wake of ongoing pass-through of cost increases.

The energy price fell 14.1% y/y in October vs. the 18.7% drop in September and prices for foods excluding perishable foods rose 7.3% in October vs. 8.5% in September. Processed food prices rose 8.8%, down from September's 10.1%.