Japan inflation stays at seven-year high in May

Japan inflation stays at seven-year high in May
Prices in Japan are rising, though at a slower pace than many other developed economies (Photo: AFP/File/Charly Triballeau)

TOKYO: Japan’s core consumer prices jumped 2.1 per cent again in May, the second consecutive monthly jump of a level not seen in seven years, official data showed Friday (Jun 24).

The core consumer price index, which excludes fresh food, jumped 2.1 per cent year-on-year in May, according to figures released by the internal affairs ministry.

The rise follows a 2.1 per cent jump in April, the first time since March 2015 that the figure breached the 2.0 per cent set by the Bank of Japan (BoJ) as its long-term inflation target.

The reading, in line with market expectations, comes after the Japanese central bank last week stuck to its monetary easing policy even as other central banks raise interest rates to tame inflation.

The BoJ did, however, said it would “pay due attention” to forex markets after the yen hit a 24-year low.

Excluding energy, prices were up 0.8 per cent in May, also in line with market consensus, following a 0.8 per cent rise in April.

The BoJ’s ultra-loose monetary policy aims to achieve two-per cent inflation, a target that has been stubbornly out of reach during years of price stagnation.

But the bank has cautioned that it sees recent rising prices as a temporary and volatile trend and that it needs to stick with easing to achieve more long-lasting rises.

Inflation has been rising for months in the United States and elsewhere as buoyant demand for cars and other goods clashes with supply problems caused by COVID-19 lockdowns.

The problem became dramatically worse after Russia invaded Ukraine in February and Western nations imposed steep sanctions on Moscow, sending food and fuel prices soaring, a particular problem in resource-poor Japan.

Source: AFP/yb