Consumer inflation in Japan is expected to be higher in May
Jun 22, 2022
Retail in Asia
Source : Redd
The core consumer price index in Japan is predicted to rise 2.1 percent from last May, marking the second month in a row that it has risen above the central bank’s 2 percent inflation target. “Although there was a lull in the growth of energy costs due to an expansion of subsidies and a peaking out of recent fuel prices gains, increases in food product prices likely drove consumer prices higher,” reported analysts from Mizuho Research & Technologies. In April, the nationwide core consumer price index (CPI), excluding volatile fresh food expenses but including energy costs, increased by 2.1 percent. This is the first time in seven years that it exceeded the Bank of Japan’s objective. Consumer inflation is expected to remain around 2 percent in the next few months, according to analysts. The Bank of Janpan (BOJ) held interest rates ultra-low last week, sticking to its guidance to keep borrowing costs “present or lower,” putting it even farther at odds with other major central banks, who are aggressively tightening policy to combat growing inflation. Analysts estimate business mood for big manufacturers to be somewhat less upbeat in the BOJ’s tankan quarterly survey results. According to a poll of 16 economists, the headline index is predicted to fall to plus 13 in June from plus 14 three months earlier, owing to supply delays caused in part by China’s tight COVID-19 lockdowns. However, the mood among large non-manufacturers is predicted to improve to plus 14 from plus 9, indicating that service-sector businesses are overcoming the effects of the coronavirus outbreak. Analysts predict the index for big manufacturers to return to plus 14 in the next three months, while the index for big non-manufacturers is expected to rise to plus 17.