Inflation in Japan Rising for Five Months with Fuel Prices as Main Driver

Japan’s Ministry of Internal Affairs and Communications said today that the core consumer price index (CPI), which excludes prices for basic food items, rose 0.2% in January from a year earlier. Higher energy costs and a weaker yen continue to be a factor in inflationary pressures.

The fastest rise in energy costs in more than 40 years pushed up core CPI for the fifth month in a row.

Rising energy and commodity costs have put Japanese households under pressure. Japanese Prime Minister Fumio Kishida said yesterday that the government would consider additional measures to cushion the impact.

Energy prices increased by 17.9% year-on-year. This was the sharpest increase since January. In 1981, prices for kerosene rose by 33.4% and for gasoline by 22%.

The consumer price index for January grew at a slower pace than in December (+0.5%), due to the fading effects of the increase in housing prices.

Service providers have increased prices for accommodation after the government suspended discount programs to stimulate local tourism.

Core CPI is still far from the Bank of Japan’s (BOJ) inflation target of 2%, raising the prospect that the BOJ will continue its monetary easing.

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