Japan’s capital seen facing increased inflation pressure: Reuters poll
1:13 am Friday, July 19th, 2024
TOKYO (Reuters) – Tokyo-area’s core consumer inflation likely accelerated slightly in July compared with the previous month, a Reuters poll of 17 economists showed on Friday, highlighting persistent upward pressure on the cost of living.
Cost-push factors stemming from imports of fuel, food, crude and other commodities, exacerbated by the weak yen, is putting upward presrure on inflation in Japan.
The central bank has emphasised the need for inflation to become durable and to be demand-pulled through wage hikes and household consumption growth, which will pave the way for normalising monetary policy.
Data by the internal affairs and communications ministry out on July 26 is expected to show inflation in the Tokyo-area likely accelerated 2.2% in July from 2.1% in the previous month, according to the Reuters poll.
The core Consumer Price Index (CPI) in the Tokyo area, which excludes volatile fresh food prices, becomes available a month ahead of the natiowide figures and serves as a leading price gauge.
Retail prices at supermarkets have slowed in July, with price pressures on food and daily goods weakening, said Takeshi Minami, chief economist at Norinchukin Research Institute.
“That said, the yen is weakening and crude oil prices have remained elevated,” Minami said.
“The end of government measures aimed at easing inflation has brought about reacceleration of electricity and gas utility fees, causing year-on-year rises in energy have become even higher.”
(Reporting by Tetsushi Kajimoto; Editing by Stephen Coates)
