TOKYO (Reuters) – Japan’s core consumer inflation rate likely hit an eight-year high in September as firms sought to offset pressure from high raw material costs and a sliding yen by hiking their prices, a Reuters poll showed on Friday.
Other data next week is expected to show the trade deficit will come in at nearly $15 billion in September, as the yen’s sharp decline this year swelled import costs, according to the poll.
The Japanese currency briefly slid to a 32-year low against the U.S. dollar this week.
Economists forecast the nationwide core consumer price index (CPI), which excludes volatile fresh food prices but includes energy, jumped 3.0% year-on-year in September.
“The main driver behind the increase are rising prices of food such as confectionary products and prepared foods,” said Rikuto Minami, an analyst at Mizuho Research & Technologies.
The increase would mark the fastest rise since September 2014. The forecast strongly suggested that core CPI would stay above the central bank’s 2% inflation target for a sixth consecutive month.
The Bank of Japan will hold its next policy meeting on Oct. 27-28. It has kept its short-term interest rate target at -0.1% and maintained its pledge to guide 10-year government bond yields around 0% despite broadening price pressures, bucking a global trend of aggressive policy tightening.
Governor Haruhiko Kuroda has repeatedly vowed to keep the BOJ’s stimulus effort intact, because any cost-push rise in inflation would be temporary.
Separate data is likely to show Japan suffered a trade deficit of 2.167 trillion yen ($14.70 billion) in September due to high import costs that are being aggravated by the weakening yen, according to the poll.
It would be the 14th straight month of deficits and follow a record 2.817 trillion yen shortfall in August. Imports by value likely surged 45.0% in September from a year earlier, outpacing a 27.1% rise in exports, the poll showed.
The government will release the consumer price data on Oct. 21 at 8:30 a.m. (Oct. 20, 2330 GMT) and the trade balance data on Oct. 20 at 8:50 a.m. (Oct. 19, 2350 GMT).
($1 = 147.4000 yen)
(Reporting by Daniel Leussink; Editing by Kim Coghill)
