A weak yen has been pushing up the cost of imported commodities
Japan’s consumer price growth accelerated to a 40-year high in October, driven by a weak national currency and imported cost pressures, government data showed on Friday.
According to the report, the nationwide core consumer price index (CPI) was up by 3.6% from a year earlier, showing the fastest pace of growth since 1982. Last month’s jump exceeded the 3.5% rise expected by economists and the 3% gain seen in September.
The rise in the index, which excludes volatile fresh food prices but includes oil products, confirmed that inflation remained above the 2% goal of the Bank of Japan (BOJ) for a seventh consecutive month.
The report indicated that foreign supply constraints have driven up the prices of imported food, industrial commodities and manufacturing parts. A fall in the national currency yen, which in dollar terms is down by more than 20% this year, has added to the woes.
Of the 522 items composing the CPI, 406 were more expensive in October than a year earlier. In September, the figure was 385.
Energy costs in the country soared by 15.2%, while food – excluding perishables – was up by 5.9%, the fastest rise in four decades.
Among food items, 88% were more costly than a year before, led by alcoholic drinks, such as beer and sake. Prices of household durable goods surged by 11.8%, their biggest rise since March 1975.
The BOJ has forecast average prices for the fiscal year to March 2023 will be 3% higher than in 2021-22 but that the rise for 2023-24 will be only half as great.
On Thursday, the regulator pledged to maintain monetary stimulus to achieve wage growth and sustainable and stable inflation. It will keep long-term interest rates around zero and short-term rates at minus 0.1%.
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