MNI BRIEF: Japan's Sep Core CPI Rises 3%; Highest Since 1991

Japan's annual core consumer inflation rate accelerated to a year-on-year pace of 3% as Bank of Japan officials expected, with a rise from August's 2.8% lifting the measure to its highest level since August 1991, data from the Ministry of Internal Affairs and Communications released on Friday showed.

The pace of the rise in core CPI will accelerate from October amid corporate price revisions and as the base-year effect of lower mobile phone charges wanes. The BOJ is expected to lift its CPI forecast when it meets on Oct 27-28. (See MNI POLICY: BOJ To Lift FY22 CPI Forecast; Trim Growth View)

The underlying inflation rate measured by the core-core CPI (excluding fresh food and energy) rose 1.8% y/y in September, up from August’s 1.6%.The September rise was caused by high energy and food prices, excluding perishables.

The positive contribution from energy on CPI rose to 1.28 percentage point from 1.27 pp in August. Prices excluding perishables rose 4.6% y/y in September from 4.1% and its positive contribution widened to 1.03 pp from 0.92 pp.

Prices for processed foods, accounting for 15% of the total CPI on which BOJ officials focus and are sensitive to economic activities, rose 5.1% in September compared to 4.6% rise in August.