Japan inflation hits 7-year high

JAPAN'S core consumer prices posted their biggest jump in 7 years in April, official data showed Friday (May 20), as global commodity prices soared and the yen slumped against the dollar.

The core consumer price index, which excludes fresh food, jumped 2.1 per cent year-on-year, according to figures released by the internal affairs ministry.

It was the first time since March 2015 that the figure has breached the 2.0 per cent set by the Bank of Japan as its long-term inflation target.

The reading, against market expectations of 2.0 per cent, follows a 0.8 per cent rise in March, which was already the fastest increase in more than 2 years as oil prices soared.

And excluding energy, prices were up 0.8 per cent in April, against market expectations of a 0.7 per cent rise.

That was the first positive figure since July 2020, underpinning the impact of skyrocketing energy costs which have been magnified by higher import prices.

After years of price stagnation, some manufacturers and stores in Japan who rely on imported resources have begun to raise prices.

Last month, the Bank of Japan hiked its full-year inflation forecast but cautioned that it sees rising prices, driven by a surge in commodity costs partly caused by the Ukraine war, as a temporary and volatile trend.

Despite climbing prices and a slump in the yen to a 20-year low against the dollar, the Bank left its ultra-loose monetary policy unchanged.

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The bank argues that the price rises are not likely to last and therefore do not mean its inflation target has been achieved. AFP