TOKYO: Japan’s core inflation accelerated for a third straight month in July, data showed on Friday, but a slowdown in demand-driven price growth could complicate the central bank’s decision on further interest hikes in coming months.
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The nationwide core consumer price index (CPI), which excludes fresh food items, rose 2.7 per cent from a year earlier, slower than a 2.6 per cent climb in June. It matched the median market forecast and put the inflation rate at or above the central bank’s 2.0 per cent target for the 28th straight month.
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But the “core core” index, which excludes fresh food and energy costs and is closely watched by the Bank of Japan (BOJ) as a key gauge of broader inflation trends, rose 1.9 per cent after increasing 2.2 per cent in June. It dipped below the key 2.0 per cent line for the first time since September 2022.
“The increase in the core CPI reflected a phase-out of government subsidies to curb household utility bills, and with that factor excluded, the overall inflation has been slowing,” said Masato Koike, senior economist at Sompo Institute Plus.
-NewStraitsTime