TOKYO : Japan’s core consumer prices rose 2.7 per cent in the year to August, data showed on Friday, staying above the central bank’s 2 per cent goal but marking the slowest pace in nine months in a sign households are getting some respite from rising living costs.
The data will be among factors the Bank of Japan (BOJ) will scrutinise at its two-day meeting that ends on Friday, when the board is widely expected to keep interest rates steady at 0.5 per cent.
The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, matched a median market forecast and slowed from a 3.1 per cent year-on-year rise in July.
An index stripping away both volatile and fresh food and fuel costs, which is more closely watched by the BOJ as a better gauge of underlying price trends, rose 3.3 per cent in August from a year earlier, compared with a 3.4 per cent increase in July.
The BOJ exited a decade-long, radical stimulus programme last year and raised short-term interest rates to 0.5 per cent in January on the view Japan was on the cusp of sustainably hitting its 2 per cent inflation target.
While consumer inflation has exceeded the BOJ’s 2 per cent target for well over three years, Governor Kazuo Ueda has stressed the need to tread cautiously in further rate hikes on uncertainty over the impact of U.S. tariffs on Japan’s economy.
Under current forecasts made in July, the BOJ expects price pressures driven by rising rice and import costs to dissipate, and be replaced by more sustained price increases backed by solid consumption and wage growth.
