Tokyo CPI Inflation Hits 33-Year High in October, BoJ Decision Looms
2022.10.27 20:33
© Reuters.
By Ambar Warrick
Investing.com– Core CPI inflation in Japan’s capital hit a 33-year high in October, data showed on Friday, indicating continued inflationary pressures in the country as costly fuel imports and rising raw material costs were exacerbated by a weak .
rose 3.4% in October, its highest level since late-1989, data from the Statistics Bureau of Japan showed. The reading was above expectations of 3.1% and last month’s figure of 2.8%.
rose 3.5% in October and hit a 31-year high. Excluding volatile food and energy costs, retreated slightly in October to 0.2% from 0.3% in the prior month.
The readings indicate that price pressures in the world’s third-largest economy are expected to persist, and likely worsen in the coming months. Recent data showed that countrywide rose more than expected to an eight-year high in September.
Fuel and raw material imports are the biggest contributors to Japanese inflation this year, largely due to volatility in commodity markets.
The Tokyo inflation reading acts as a precursor to countrywide inflation indicators. It shows that inflation is likely to trend above the Bank of Japan’s (BoJ) 2% annual target rate for a sixth consecutive month in October, highlighting the increased price pressures faced by the Japanese economy.
But the BoJ, which is , is widely expected to hold interest rates at ultra-low levels. The central bank has cited weakening economic growth in Japan as the key reason for its accommodative stance, and has so far given no indication it wants to tighten policy.
This puts it at odds with most global central banks, which has damaged the yen severely this year. The Japanese currency sank to a 32-year low earlier this month, and is expected to remain pressured by the dollar in the coming months.
