Tokyo's core CPI rose 1.8% year on year in August, accelerating from 1.7% in July and marking a third consecutive month of faster growth. Market expectations for a September BoJ rate hike are strengthening.
Core CPI in the Tokyo metropolitan area, excluding fresh food, rose 1.8% year on year in August, according to data released by Japan's Ministry of Internal Affairs and Communications. The increase accelerated from 1.7% in July, marking a third consecutive month of faster growth. Core-core CPI rose 2.0% year on year, while energy prices declined.
Tokyo's data are viewed as a leading indicator of nationwide prices. Rising rents and service prices are adding to inflationary pressure and will be closely watched by the BoJ in its next policy decision. Markets increasingly expect the BoJ to raise interest rates in September.
Headline CPI rose 1.9% year on year, while core CPI, excluding fresh food, rose 1.8% and core-core CPI, excluding fresh food and energy, rose 2.0%. Rising rents pushed up headline CPI.
Energy prices declined year on year, while food prices remained elevated. Rising rents continue to draw attention as a factor influencing inflation trends. The yen was trading at around ¥159.35 to the dollar, and exchange-rate movements could also affect future policy decisions.