Japan CPI rises more than expected in Oct, core inflation above BOJ target
2024.11.21 19:15
Investing.com– Japanese consumer price index inflation grew slightly more than expected in October, while core inflation rose further above the Bank of Japan’s annual target, keeping expectations of more interest rate hikes in play.
, which excludes volatile fresh food items, grew 2.3% year-on-year in October, government data showed on Friday. The reading was above expectations of 2.2% and fell slightly from the 2.4% seen in the prior month.
A core inflation reading that excludes both energy and fresh food costs rose to 2.3% in October from 2.1% in the prior month. The reading is closely watched by the BOJ as a gauge of underlying inflation, and remained above the central bank’s 2% annual target.
, however, eased to 2.3% from 2.5% in October.
Japanese CPI inflation has picked up steadily this year, remaining underpinned by strong private consumption after Japanese labor unions negotiated a sharp increase in wages earlier in 2024.
Inflation had eased slightly over the past few months on softer energy prices and as the government rolled out more subsidies on utility costs. But Friday’s reading indicated that this had only a limited impact on inflation.
Sticky inflation is expected to invite more interest rate hikes from the BOJ, after the central bank raised rates twice so far in 2024.
While increased political uncertainty in the country was expected to delay the BOJ’s plans to raise rates further, Governor Kazuo Ueda clarified during the bank’s October meeting that interest rates will still rise, as long as inflation remains sustainably above its 2% target.
