Japan’s consumer inflation stays above central bank target as price hikes broaden
JAPAN’S core consumer prices rose 3.4 per cent in April from a year earlier as price hikes broadened, data showed on Friday, casting doubt on the central bank’s view inflation will slow back below its 2 per cent target later this year as cost pressures dissipate.
The increase in the core consumer price index (CPI), which excludes fresh food but includes energy items, matched a median market forecast for a 3.4 per cent gain and accelerated from a 3.1 per cent rise in March.
The rise in April, the start of Japan’s new business year when many firms tend to modify retail prices, suggests heightening price pressures may keep inflation above the Bank of Japan’s 2 per cent target longer than expected, analysts say.
An index stripping away the effects of both fresh food and fuel rose 4.1 per cent in April from a year earlier, the government data showed, marking the fastest annual pace since September 1981.
With inflation having stayed above its target for a year, markets are simmering with speculation the BOJ will soon phase out its massive stimulus that critics say is distorting markets and hurting financial institutions’ profits.
BOJ Governor Kazuo Ueda has stressed the need to keep monetary policy ultra-loose until inflation is sustainably around 2 per cent and accompanied by wage hikes.
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He has also said Japan’s core consumer inflation will slow back below 2 per cent toward the latter half of the current fiscal year ending in March 2024. REUTERS
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