Japan’s consumer prices exceeded the 2% target set by the government and the central bank for the fourth consecutive month due to soaring energy and food prices.
According to the “Consumer Price Index” released by Japan’s Ministry of Internal Affairs and Communications on the 19th, Japan’s consumer price index (excluding fresh food) rose 2.4% in July from the same month last year.
This is the largest increase in seven years and seven months since December 2014 (2.5%) when the consumption tax hike was affected.
Japan’s consumer prices rose in the 2% range for the fourth consecutive month, following April (2.1%), May (2.1%), and June (2.2%).
The main factors behind the inflation in July are high energy prices and rising energy and food prices due to the weak yen.
Energy prices rose 16.2 percent from the same month last year. Specifically, electricity prices rose 19.6% and gas costs rose 18.8%, respectively.
Food prices also rose 3.7 percent, excluding fresh food. Cooking oil rose 40.3% and bread rose 12.6%.
The Ministry of Internal Affairs and Communications said, “In addition to soaring raw material prices and transportation costs, import prices are rising due to the weak yen,” adding, “We will continue to watch the price trend.”
The Bank of Japan, the central bank of Japan, aims to increase Japan’s consumer prices by 2 percent.
The Bank of Japan hopes to increase investment and improve the performance of exporters through financial easing and the weakening yen, which will lead to higher wages and increased consumption, leading to a virtuous cycle in which prices rise.
However, it is pointed out that rising prices are not a phenomenon caused by a virtuous cycle of the economy, but by rising international oil prices and a weak yen, only increasing household burdens.
Japan’s consumer prices continue to rise, but they are still lower than other major countries.
The inflation rate in July was 8.5 percent in the U.S., 8.9 percent in the eurozone, and 10.1 percent in the U.K., respectively.
The Bank of Japan raised its consumer price growth forecast for this year to 2.3 percent at a financial policymaking meeting last month, up 0.4 percentage points from its forecast of 1.9 percent in April.