Japan’s core consumer inflation rate likely rose to a near eight-year high in August as companies passed on rising raw material costs fuelled by the weak yen, highlighting persistent price pressures in the economy, a Reuters poll showed.
Economists estimate the nationwide core consumer price index (CPI), which excludes volatile fresh food prices but includes energy, rose 2.7% last month from a year earlier.
That would mark the fastest rise since November 2014 and follow a 2.4% annual gain seen in July.
“It seems that the inflation rate was pushed up from July,” said Takeshi Minami, chief economist at Norinchukin Research Institute, adding that costs of things such as utility bills, processed food, overnight stays and eating out likely rose.
“Since moves to pass on rising import costs of raw materials continues, the nationwide CPI for August is likely to show a similar result,” he added.
The expected core CPI rise would be the fastest in 31 years when stripping out the effect of past sales taxes hikes, Minami said.
The forecast also meant core CPI was seen staying above the 2% inflation target of the Bank of Japan (BOJ) for a fifth straight month, attesting to the persistent pressure households have been facing from rising prices.
The BOJ is seen keeping its short-term interest rate target at -0.1% and its pledge to guide 10-year government bond yields around 0% at its next policy meeting on Sept. 21-22, the poll also showed.
The BOJ set its 2% inflation target in 2013, during the first year of the tenure of its current governor, Haruhiko Kuroda, who has repeatedly said the central bank will maintain its stimulus efforts, because any cost-push rise in inflation would be temporary.
The government will release the CPI data at 8:30 a.m. on Sept. 20 (2330 GMT, Sept. 19), two days before the central bank ends its policy meeting.