Japan’s core consumer prices surged 2.8 percent to a nearly eight-year high in August, in the latest sign of cost-push inflation accelerated by a weak yen to the detriment of consumers, government data showed Tuesday, heaping pressure on the dovish Bank of Japan.
The nationwide core consumer price index, which excludes volatile fresh food items, marked the fastest pace of increase in over three decades, without the effects of past consumption tax hikes.
The key gauge of inflation stayed above the BOJ’s 2 percent target for the fifth month, accelerating from 2.4 percent in July, the Ministry of Internal Affairs and Communications said.
The headline figure marked the 12th straight month of year-on-year growth amid persisting inflationary pressures from higher energy costs blamed on Russia’s war on Ukraine and the rapidly weakening yen. Economists expect it to top 3 percent this year, posing a challenge for the BOJ.
“What is striking is the impact of the weaker yen is getting bigger and bigger, while we have seen food prices also rising,” said Yoshiki Shinke, senior executive economist at the Dai-ichi Life Research Institute.
The 2.8 percent gain in the core CPI was the steepest since 2.9 percent in October 2014, following a consumption tax hike from 5 to 8 percent earlier that year. Stripping away the tax hike boost, it rose 2.8 percent in September 1991.