Tokyo’s core consumer price index (CPI) rose 4.3% in January from the previous year, surpassing the Bank of Japan’s (BOJ) target for the eighth consecutive month, according to government data released on Monday. The index, which excludes fresh food prices but includes fuel, is considered a nationwide inflationary indicator.
Analysts attribute the increase in core inflation to rising food and fuel prices, as well as a broad increase in product prices. This may put pressure on the BOJ to delay its massive economic stimulus program.
The increase in Tokyo’s core CPI exceeded analysts’ expectations, with a 4.2% increase on an annual basis, the fastest gain since May 1981. This follows a 3.9% increase in December.
Meanwhile, Tokyo’s core CPI, which excludes both fuel and fresh food prices, rose 3.0% in January from a year earlier, compared to a 2.7% annual increase in December.
Despite this inflationary trend, the BOJ maintained its ultra-accommodative monetary policy this month. However, it has added inflation expectations to its latest quarterly forecast as various companies move forward with increasing product prices to pass on higher raw material costs to households.