Japan Core CPI Inflation Hits Near 8-Year High in August

By Ambar Warrick

Investing.com-- Japan’s core consumer inflation rose more than expected to a near eight-year peak in August, data showed on Tuesday, as heightened raw commodity costs and a depreciating yen continued to batter the economy with rising price pressures.

The national core consumer price index, which excludes the price of fresh food but includes energy, rose 2.8% in August, compared to a 2.4% rise in July, data from the Statistics Bureau showed. The figure also came above estimates for growth of 2.7%.

Overall nationwide CPI rose 3% in August, more than July’s reading of 2.6%, and also at an eight-year high.

The reading marks the fifth straight month that inflation has trended above the Bank of Japan’s (BoJ) 2% annual target rate, and reflects continued headwinds for the world’s third-largest economy.

The trend comes as industries pass on heightened commodity costs onto customers. The cost of utilities such as electricity has also shot up this year due to the rising cost of coal and gas imports.

The central bank, which will conclude a monetary policy meeting later this week, has given no indication that it plans to move its benchmark rate above the negative 0.1% it currently stands at. But this has severely dented the yen this year, which is trading near 24-year lows against the dollar.

Japan’s economy is still reeling from the aftermath of the COVID-19 pandemic, with restrictions on travel being relaxed only recently. The BoJ has cited lingering effects from the pandemic as its key reasoning behind not tightening policy.

Rising interest rates across the rest of the globe have made investors less inclined toward holding the yen, which has largely lost its safe haven status this year.

The country recently logged a record-high trade deficit, as commodity imports grew more expensive due to a weakening yen, and as softening industrial production meant fewer goods were exported.

Despite better-than-expected growth in the second quarter, the Japanese economy is likely to face continued headwinds from the interest rate differentials and elevated commodity prices for the remainder of the year.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    EC2A 2BN
    United Kingdom

    T:  + 44 ( 0 ) 203 857 2000
    E:  info@ofmarkets.com
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    United Arab Emirates
    T: + 00 971 44 22 888
    E:  info@ofmarkets.com

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

www.onefinancialmarkets.com is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: