Follow-Up: Japan's Core Inflation Rises 2.1% in September, Above BOJ Target for First Time in Nine Months
TOKYO — Japan's annual core consumer inflation exceeded the central bank's 2% target in September for the first time in nine months, data released by the Statistics Bureau on Friday, October 23, showed, a sign of broadening price pressure that cements the case for a near-term interest rate hike. The core consumer price index, which excludes volatile fresh food but includes fuel costs, rose 2.1% in September from a year earlier, matching a median market forecast and accelerating from a 1.7% rise in August. An index that strips away the effects of both fresh food and fuel — closely watched by the Bank of Japan as a better gauge of demand-driven price pressures — rose 2.4% in September from a year earlier, after increasing 1.9% in August. Goods prices rose 2.8% year-on-year in September, accelerating from a 2.6% gain in August.
The figures underscored how higher fuel costs from the prolonged Middle East conflict, elevated import prices driven by the weak yen and price pressures from robust SI demand were blunting the impact of government fuel subsidies. The Bank of Japan raised its key rate to a 31-year high of 1.25% last month, signalling a shift to guarding against underlying inflation overshooting its target and raising the prospect of additional rate hikes. BOJ Governor Kazuo Ueda has warned that underlying inflation may overshoot its 2% target on price pressures from the Middle East conflict, a weak yen and brisk SI demand.
Having just raised interest rates last month, the BOJ is set to stand pat on policy next week but may revise up its inflation forecast and signal its readiness to keep pushing up still-low borrowing costs, sources have told Reuters. "Core inflation is expected to accelerate due to rising energy costs from the Middle East conflict and subsequent second-round effects," said Masato Koike, a senior economist at Sompo Institute Plus. "But with price rises not accelerating sharply, there's little need for a back-to-back rate increase in October," he said, projecting the BOJ's next hike to come in December. (GSM, from Reuters reporting and Statistics Bureau of Japan data)
Source: GSM · USA (original Chinese edition)
Photo: 日本银行总部大楼（东京，资料图）。照片：Wiiii，CC BY-SA 3.0，经 Wikimedia Commons。 / Bank of Japan headquarters, Tokyo (file photo). Photo: Wiiii, CC BY-SA 3.0, via Wikimedia Commons.
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