Japan’s core consumer inflation rate likely hit a nearly eight-year high in August as companies passed on rising commodity costs fueled by a weak yen, underscoring continued pressures on prices in the economy, according to a Reuters poll.
Economists estimate that the national core consumer price index (CPI), which excludes volatile fresh food prices but includes energy, rose 2.7% last month from a year earlier. .
This would mark the fastest rise since November 2014 and follow a 2.4% annual gain seen in July.
“It looks like the inflation rate went up from July,” said Takeshi Minami, chief economist at the Norinchukin Research Institute, adding that the costs of things like utility bills, processed food, overnight stays and dining out has likely increased.
“As measures to pass on rising commodity import costs continue, the national CPI for August is expected to show a similar result,” he added.
The expected rise in core CPI would be the fastest in 31 years if the effect of past sales tax hikes were removed, Minami said.
The forecast also meant that the core CPI would remain above the Bank of Japan’s (BOJ) inflation target of 2% for a fifth consecutive month, attesting to the continued pressure faced by households due to rising prices.
The BOJ is expected to maintain its short-term interest rate target at 0.1% and its promise to guide 10-year government bond yields around 0% at its next policy meeting on September 21-22, also showed the poll.
The BOJ set its inflation target at 2% in 2013, in the first year of its current governor, Haruhiko Kuroda’s term, who has repeatedly said the central bank will continue its stimulus efforts because any hikes cost inflation would be temporary. .
The government will release CPI data at 8:30 a.m. on September 20 (2330 GMT, September 19), two days before the central bank ends its policy meeting.