Consumer inflation in Japan’s capital hits 33-year high

CORE consumer prices in Japan’s capital, a leading indicator of nationwide figures, rose 3.4 per cent in October from a year earlier, data showed on Friday (Oct 28), marking the fastest annual pace since 1989 in a sign of broadening inflationary pressure.

The rise in the Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, exceeded a median market forecast for a 3.1 per cent gain and followed a 2.8 per cent gain in September.

Inflation in the Tokyo area thus exceeded the central bank’s 2 per cent target for five straight months.

The data came as the Bank of Japan (BOJ) meets for a two-day policy meeting that ends later on Friday, when it is expected to revise up its inflation forecasts but keep monetary policy ultra-loose to underpin a fragile economic recovery.

BOJ governor Haruhiko Kuroda has repeatedly said the bank must maintain ultra-low interest rates on the view the recent cost-push inflation will likely prove temporary. REUTERS