TOKYO: Japan’s core consumer inflation quickened to 2.8% in August to hit the fastest annual pace in nearly eight years, data showed on Tuesday, as pressures from higher raw material costs and a weak yen broadened. While core consumer inflation has exceeded the central bank’s 2% target for five straight months, the Bank of Japan (BOJ) is unlikely to raise interest rates any time soon as wage and consumption growth remain weak, analysts say.
The latest data highlights the dilemma the BOJ faces as it tries to underpin a fragile economy by maintaining ultra-low interest rates, which in turn are fueling an unwelcome slide in the yen that is driving up households’ cost of living.
The rise in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, was slightly bigger than a median market forecast for a 2.7% increase and followed a 2.4% gain in July. It was the fastest pace of rise since October 2014. –Agencies
