Japan’s customer prices grew at a slower pace
Japan’s customer prices increased for a fifth straight month at a slower pace than in December. It boosted the country’s central bank’s likely to drag behind other economies in rising interest rates.
The core consumer price index (CPI) increased 0.3% in January from a year earlier. On Friday, government data showed that it excludes volatile fresh food prices but includes fuel costs.
That turned out weaker than the median forecast for a 0.4% gain in a Reuters poll and a 0.6% rise in the last two months.
The Bank of Japan will examine at its next policy meeting, scheduled for the middle of March.
Core consumer inflation has posted a year-on-year increase every month since September. January’s gain marked the slowest year-on-year rise in four months.
The neutral growth rate shows price rises in the world’s third-largest economy have remained highly modest.
Overview of the customer prices growth
Japan’s inflation rate peaked last month for a fifth consecutive month, as a rise in food prices overshadowed a dip in energy prices. It keeps the country’s central bank on the sidelines as it tries to spur growth. Prices rose from a year earlier, the Ministry of Internal Affairs and Communications said in a statement Monday. The slower-than-expected increase in prices was a surprise, as economists had expected prices to rise 2.6% from a year earlier. The inflation rate was just below the central bank’s 2% target, which would likely keep the Bank of Japan on the sidelines as it tries to spur growth.
The small gain supported expectations the Bank of Japan (BOJ) will maintain its ultra-loose monetary policy to achieve its 2.1% inflation target.
The BOJ keeps its massive monetary stimulus as it seeks to have inflation reach its mark, despite worries about the results of a weakening yen.
Some analysts think that has helped raise Japanese companies’ prices for overseas commodities. It was pushing up its trade deficit to an eight-year high in January.
BONUS VIDEO: Weekly news summary from the markets
The post Japan’s customer prices grew at a slower pace appeared first on forexinsider24.com.