Japan Consumer Price Inflation At 41-Year High
Japan’s consumer price inflation accelerated further in January to hit a fresh 41-year high, adding pressure on the central bank to withdraw its massive monetary stimulus.
Core inflation that excludes volatile fresh food climbed to 4.2 percent in January from 4.0 percent in the previous month, data from the Ministry of Internal Affairs and Communications showed Friday.
The rate was the fastest since September 1981 and matched economists’ expectations.
Headline inflation rose to 4.3 percent from 4.0 percent in December. The 4.3 percent was the strongest since December 1981.
Inflation has remained above the 2 percent target for the tenth straight month.
Excluding fresh food and energy, inflation advanced to 3.2 percent from 3.0 percent in the previous month.
Fresh food prices advanced to 7.2 percent from 4.9 percent. Meanwhile, growth in energy prices slowed to 14.6 percent from 15.2 percent a month ago.
On a monthly basis, overall consumer prices gained 0.4 percent, following December’s 0.3 percent increase.
With government energy subsidies taking effect from this month, inflation is expected to fall below the Bank of Japan’s 2 percent target by mid-year, Capital Economics’ economist Darren Tay, said.
At the January monetary policy meeting, the BoJ left its yield curve control and negative interest rates unchanged.
At the parliamentary hearing on Friday, BoJ Governor nominee Kazuo Ueda said it would be appropriate to continue monetary easing measures.
Markets widely expect a policy change under the governorship of Ueda.
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