Japan core inflation rises to 2.1% in September
Japan’s core inflation accelerated from 1.7% in August, while Tokyo’s separate reading came in higher at 2.7%.
By Jordan Bell · Startups & Deals Reporter
· 2 min read
Japan core inflation September data showed consumer prices excluding fresh food rose 2.1% from a year earlier, up from 1.7% in August, according to CNBC. For investors watching the Bank of Japan, the increase puts the nationwide measure back above the central bank’s 2% target, although the report does not establish what policy action, if any, will follow.
The reported September figure was the highest this year for Japan’s nationwide core inflation measure. CNBC attributed the acceleration to elevated energy prices and higher import costs associated with a weak yen.
What did Japan’s September inflation figures show?
Nationwide core CPI: 2.1% year on year in September, excluding fresh food, versus 1.7% in August, CNBC reported.
Nationwide headline CPI: 2.1% year on year, according to CNBC.
Nationwide core-core CPI: 2.4% year on year. This measure excludes both fresh food and energy, CNBC reported.
The different labels matter because reports can cite more than one inflation gauge. In this release, “core” means the index without fresh food. “Core-core” removes fresh food and energy as well. The 2.1% core figure is therefore a different measure from the 2.4% core-core reading.
How does nationwide inflation compare with Tokyo?
Tokyo’s September core CPI rose 2.7% from a year earlier, substantially above the 2.1% nationwide core reading. Reuters reported that Tokyo core CPI excludes fresh food but includes fuel, and that it had risen 1.8% in August.
Tokyo’s index excluding fresh food and fuel climbed 3.0% year on year in September, Reuters said. The Tokyo data are widely treated as an early signal for national price trends, but they are not the same as the nationwide September result.
Reuters reported that the Tokyo acceleration partly reflected the end of water-bill and childcare subsidies. It also cited higher prices across food and everyday necessities tied to rising raw-material costs. Those city-level factors should not be read as a detailed breakdown of the nationwide release.
What does the release mean for the Bank of Japan?
The Bank of Japan was scheduled to update its quarterly inflation projections at its October 29-30 policy meeting, Reuters reported. The central bank had said underlying inflation was close to its 2% objective but had not yet reached it, according to Reuters.
September’s national core reading above 2% adds current price data to that backdrop. Still, the figures alone do not confirm a future rate move. Investors following Japan’s monetary policy will be looking for the bank’s updated forecasts and assessment of underlying inflation alongside the CPI data.
This story draws on original reporting from CNBC.
