Tokyo, 18 November, /AJMEDIA/
Japan’s core consumer prices surged 3.6 percent in October, the fastest pace in about 40 years, government data showed Friday, providing fresh evidence of broadening price hikes that are hitting household spending and testing the Bank of Japan’s resolve to maintain its ultralow rate policy.
A recent bout of what the BOJ views as inflation prompted by higher energy and raw material costs, and exacerbated by the weakening of the yen accelerated by the central bank’s dovish stance, has driven the nationwide core consumer price index, excluding volatile fresh food items, to rise for the 14th straight month.
The key gauge has remained above the BOJ’s 2 percent target for the past seven months, even as Governor Haruhiko Kuroda has taken the view that the recent inflation, not driven by strong domestic demand and wage growth, will not be sustained and therefore does not require an immediate change in monetary policy.
The steep rise in the headline inflation rate followed a 3.0 percent gain in September.
An increasing number of Japanese companies have been hiking prices for everyday goods to pass on higher costs. As Russia’s war in Ukraine has sent energy prices higher, fuel costs have also been rising sharply, prompting the government to ease the pain on households by curbing gasoline and kerosene prices.
Food prices, excluding perishable items, surged 5.9 percent, as many companies went ahead with price hikes in October, according to the Ministry of Internal Affairs and Communications.
Energy prices — including electricity, city gas, gasoline and kerosene — jumped 15.2 percent, down from the previous month’s 16.9 percent but a bad omen for the winter heating season.
The sharp gain in core CPI also came as the impact of cheaper mobile communication plans fell out of the data on a year-on-year basis.
The so-called core-core CPI, which strips away both energy and fresh food items, rose 2.5 percent.
