Japan's inflation cooled for the second consecutive month, but remains above the Bank of Japan's target. The recent depreciation of the yen has exacerbated cost-driven inflationary pressures that may persistfreeamericanrouletteonlineconcerns.
Data released on Friday by Japan's Ministry of Internal Affairs and Communications showed that the consumer price index (CPI) excluding fresh food rose 2.5 percent year-on-year in April.freeamericanrouletteonline.2%, in line with analysts 'expectations. The index has been at or above the Bank of Japan's 2% target for 25 consecutive months.
The biggest factor affecting CPI is the slowdown in processed food price increases to 3.5 percentfreeamericanrouletteonline.5%, partly due to the base effect, a year ago when processed food prices rose sharply, indicating that companies are increasingly willing to pass on rising costs to consumers. The increase in accommodation prices has also slowed down, posing a drag on the overall index.
The CPI increase excluding fresh food and energy prices fell to 2.4%, also in line with general expectations.
This result alone is unlikely to dampen the Bank of Japan's determination to look for opportunities to further scale back its easing policy. The yen is still near a 34-year low after the Japanese government suspected of intervening twice in the market to support its currency, and observers are increasingly wary of the risk of the Bank of Japan raising interest rates early.
Service prices rose 1.7% year-on-year, slowing down from 2.1% in the previous month, a key consideration emphasized by the Bank of Japan during policy reviews.
That trend could shift in the coming months, as many companies begin implementing salary increases after Japan's largest union group won promises of pay increases of more than 5% from large companies, the largest in more than three decades. The Bank of Japan hopes wage growth will stimulate spending and price increases.
“freeamericanrouletteonlineI think from now on, wage increases will steadily put upward pressure on prices on the demand and supply side,"said Kohei Okazaki, senior economist at Nomura Securities.