Japan Core Inflation Hits 2.1% in September as Weak Yen and Energy Costs Bite
Updated
Updated · CNBC · Oct 22
Japan Core Inflation Hits 2.1% in September as Weak Yen and Energy Costs Bite
3 articles · Updated · CNBC · Oct 22
Summary
Japan’s core CPI rose 2.1% in September from 1.7% in August, the fastest this year, with headline inflation also at 2.1% and the BOJ’s preferred core-core gauge at 2.4%.
Import costs drove the pickup: a weak yen, pricier U.S. oil replacing some Middle East supply, and indirect energy effects pushed goods inflation to 2.8% and other industrial products to a 13-month high of 3.9%.
That acceleration came despite offsets elsewhere, with rice prices down 20.6% year on year and consumer energy prices falling 0.6% thanks to government subsidies; services inflation still edged up to 1.5% from 1.2%.
The stronger inflation print bolstered expectations for another BOJ rate hike after September’s 25-basis-point increase lifted rates to 1.25%, with Capital Economics forecasting a December move.
Policy tension is building as parliament debates cutting the food consumption tax to 1% from 8% for two years, though Finance Minister Satsuki Katayama said the government and BOJ remain aligned.