MNI BRIEF: Tokyo CPI Rises 3.2% In June Vs. May 3.1%

The y/y rise in the Tokyo core inflation rate accelerated to 3.2% in June from May's 3.1% on the back of continued high food prices, indicating that the nationwide June core CPI could rise from May's 3.2%, 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 3.8% y/y in June, decelerating from May's 3.9%. The Tokyo core CPI remained above the BOJ's 2% target for the 13th straight month in June, a sign that corporate pass-through of cost increases continued.

Low energy prices – down 6.9% against May's 8.2% fall – impacted the June index, however, foods excluding perishables boosted the print at 8.9%, flat versus May. Processed food prices, an important factor for the BOJ, rose 10.0% y/y in June after rising 9.5%, while prices for eating and drinking services also rose 7.6% after rising 8.1% in May.