Japan inflation ticks up ahead of BOJ report
TOKYO — Japan’s inflation picked up the pace in June for the first time in four months, though only slightly, showing that there is still a long way to go before it reaches the Bank of Japan’s 2% target.
Core consumer prices rose 0.8% from a year earlier in June, marking the 18th straight month of year-over-year increases, government data showed Friday.
The figure compares with a 0.7% increase in May and a 0.8% rise expected by economists polled by the Nikkei. Japan’s core CPI excludes volatile fresh-food prices.
The improvement, however, was due mainly to higher energy costs, indicating that underlying inflation may still lack momentum.
The so-called core-core CPI, the BOJ’s favored measure which strips out both fresh food and energy prices, rose 0.2% in June from a year earlier, down from a 0.3% increase in the previous month.
"After peaking in the third quarter…we expect inflation to weaken toward year-end as oil price and foreign exchange effects fade," says Barclays analyst Tetsufumi Yamakawa. Mr. Yamakawa expects core-core inflation to trend around 0.5% during this period.
Given recent softeners in price movements, analysts expect the Japanese central bank to lower their inflation projections when it is scheduled to release its quarterly report on the economy and prices on July 31. The bank currently expects the core CPI to rise 1.8% in the year ending March 2021, excluding the impact of a planned sales tax increase in October 2019.
Write to Megumi Fujikawa at [email protected]
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