Tokyo's August all-items CPI excluding fresh food rose 1.8% year on year. Although the pace accelerated for the third consecutive month, the index remained below the Bank of Japan's 2% inflation target for the seventh straight month.
The Statistics Bureau reported that Tokyo's August 23-ward all-items CPI excluding fresh food stood at 102.3, up 1.8% year on year. The rate of increase widened from 1.7% in July by 0.1 percentage point, accelerating for the third consecutive month.
The main factor behind the increase was higher food prices excluding fresh food, particularly in the food sector, where the pass-through of raw material and logistics costs is progressing. The index excluding the effects of fluctuations in fresh food prices is closely watched to assess underlying price trends.
Tokyo's all-items index rose 1.9% year on year, while the all-items index excluding fresh food and energy rose 2.0%. The so-called core-core CPI reached a level roughly in line with the Bank of Japan's 2% target.
While the Bank of Japan left its policy rate unchanged at its July meeting, it indicated that it is assessing the timing of additional rate hikes while monitoring the virtuous cycle between prices and wages. Going forward, attention will focus on food price trends from autumn onward, the sustainability of wage increases and the impact of the yen's exchange rate.