Annual core inflation in Japan’s capital accelerates in July
People shop for snacks at a confectionery store in Tokyo, Japan, July 28, 2026. REUTERS/Manami Yamada
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TOKYO, July 31 : Annual core inflation in Japan’s capital accelerated in July, data showed on Friday, a sign of broadening price pressures from the Middle East conflict that keeps the central bank on track to consider further raise interest rates.
Separate data showed factory output rose in June, and manufacturers projected further increases this month and next, suggesting the economy was weathering the hit from high oil costs and supply disruptions from the Middle East war.
The Tokyo core consumer price index (CPI), which excludes volatile fresh food costs, rose 1.9 per cent in July, faster than a median market forecast for a 1.7 per cent gain.
It followed a 1.6 per cent rise in June and stayed below the BOJ’s 2 per cent target for a sixth straight month.
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The increase in the index, seen as a leading indicator of nationwide trends, was driven by continued gains in prices of food and daily necessities, the data showed.
Service-sector inflation was steady at 1.1 per cent in July, a sign firms were slow in passing on rising labour costs compared with that for raw material.
An index stripping away the effect of fresh food and fuel, which is closely watched by the BOJ as a better gauge of trend inflation, rose 2.0 per cent in July after a 1.9 per cent gain in June.
The BOJ is widely expected to keep interest rates steady on Friday after raising them to a 31-year high of 1 per cent in June, as the economy faced mounting inflationary pressure from the Middle East war and a weak yen.
Source: Reuters
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