TOKYO, Dec 26 : Core consumer prices in Japan’s capital rose 2.3 per cent in December from a year earlier, data showed on Friday, staying above the central bank’s 2 per cent target and firming the case for further interest rate hikes.
The increase in the Tokyo core consumer price index, which excludes volatile costs of fresh food, compared with a median market forecast for a 2.5 per cent rise. It slowed from a 2.8 per cent increase in November, due largely to a fall in utility bills.
A separate index for Tokyo that strips away both fresh food and fuel costs – closely watched by the Bank of Japan as a measure of demand-driven prices – rose 2.6 per cent in December from a year earlier after a 2.8 per cent increase in November.
The data will be among the factors the BOJ will scrutinise at its next policy meeting on January 22 and 23, when the board issues fresh quarterly growth and inflation forecasts.
The BOJ raised interest rates last week to a 30-year high of 0.75 per cent, taking another landmark step in ending decades of huge monetary support in a sign of its conviction Japan is progressing toward durably hitting its 2 per cent inflation target.
With core inflation exceeding the BOJ’s target for nearly four years, Governor Kazuo Ueda has signalled the BOJ’s readiness to keep raising rates if the economy continues to improve, backed by solid wage gains.
Some analysts say the yen’s recent declines could add to inflationary pressure through rising import costs, a point a few BOJ board members flagged at last week’s policy meeting.
Source: CNA
