By Daniel Leussink
TOKYO (Reuters) – Japan’s core consumer prices rose for the second straight month in October, reinforcing signs that surging energy and raw material costs are gradually pushing up inflation.
Consumer inflation is expected to pick up in coming months due to higher fuel costs, though any price rises in the country will likely be moderate compared with other advanced economies as weak wage growth keeps firms from hiking them much.
The core consumer price index (CPI), which excludes volatile fresh food prices but includes fuel costs, rose 0.1% year-on-year in October, government data showed on Friday.
That matched the median forecast in a Reuters poll and followed a similar rise in September, which was the first uptick since March last year.
The data will be among factors the Bank of Japan will scrutinise at its last policy meeting of the year, which is scheduled for the middle of next month.
Japan has found itself exposed to soaring global commodity prices, which led to the fastest rise in wholesale inflation in four decades in October. But core CPI has stayed near zero as weak consumption keeps firms from raising prices.
BOJ Governor Haruhiko Kuroda said this week he expected inflation to accelerate to around 1% in the first half of next year as the economy recovers to pre-coronavirus levels, still far off its 2% target.
The central bank has stuck to massive monetary stimulus in its quest to have inflation reach that illustrious target, despite worries about the side-effects of prolonged low interest rates to banks’ bottom lines.
(Reporting by Daniel Leussink; Editing by Sam Holmes)
