Japan Inflation

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Japan: Inflation rises to highest level in nearly five years

September 27, 2013

In August, the core consumer price index, which excludes volatile fresh food prices, rose 0.3% over the previous month and was above the 0.1% rise recorded in July. Higher prices for culture and recreation, as well as for fuel, electricity and water charges, were partially offset by lower prices for clothing and footwear, as well as for furniture and housing appliances.

Core inflation stepped up from 0.6% in July to 0.8% in August. The figure represents the highest level recorded since November 2008. Moreover, the print was slightly above the 0.7% rise market analysts had expected. Overall inflation in August rose to 0.9%, up from 0.7% in July.

The Tokyo core consumer price index - available one month in advance of the national figures and thus a leading indicator for countrywide inflation - rose 0.2% in September over the same month last year (August: 0.4%). This result missed market expectations of a 0.3% increase.

The Bank of Japan (BoJ) expects that core inflation will be between 0.5% and 0.8% in the fiscal year ending March 2014. In the following fiscal year, the BoJ sees inflation - excluding the effects of the consumption tax hikes - accelerating to between 0.7% and 1.6%. FocusEconomics Consensus Forecast panelists expect inflation of 0.1% in the calendar year 2013, which is up 0.1 percentage points from last month's estimate. In 2014, the panel sees inflation at 1.9%.


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Japan Inflation August 2013

Note: Year-on-year and month-on-month var. of consumer price index in %.
Source: Statistics Bureau (SB) and FocusEconomics calculations.


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