Core inflation in Japan rises for third consecutive month, central bank faces pressure
Date
8/25/2024 8:57:23 AM
(MENAFN) Japan's core inflation accelerated for the third consecutive month in July, maintaining the potential for additional interest rate hikes by the bank of Japan (BoJ) in the near future. The national core consumer price index, which excludes fresh food, increased by 2.7 percent compared to the same month last year, up from a 2.6 percent rise in June. This inflation rate matched market expectations. Meanwhile, the core index, which excludes both fresh food and energy costs and is a critical indicator for the BoJ, saw a 1.9 percent rise, following a 2.2 percent increase in June.
The Bank of Japan has closely monitored these inflation trends, particularly after surprising markets in July with its decision to raise interest rates to their highest level in 15 years. The BoJ has indicated a readiness to implement further rate hikes, driven by expectations that inflation will persist above its 2 percent target. The central bank's policy decisions are influenced by broader economic conditions, including the recent data showing a robust recovery in Japan's economy during the second quarter, driven by strong consumer spending.
A recent poll revealed that 57 percent of economists anticipate the BoJ will raise borrowing costs again before the end of the year. This expectation underscores the central bank's ongoing challenges in balancing inflation control with economic growth.
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