Investing.com — Data from Friday showed inflation in Japan’s capital surpassing expectations in January, suggesting a similar rise in inflation nationwide and likely tightening measures by the central bank. is shown.
Data from the Bureau of Statistics showed January’s annualized rate rose 4.3% from 4.0% in the previous month to a 41-year high and beating expectations of 4.2%.
Including the prices of variable items such as fresh food, January inflation rose to 4.4% from 4% the previous month, also the highest in more than 41 years.
CPI inflation in Tokyo has beaten expectations for the past four straight months as Japan struggles with rising fuel and food import costs. Tokyo readings typically act as a domestic frontrunner, and by the end of 2022 he was trending to a 41-year high.
It rose 0.4% after the reading, given that rising inflation will increase pressure to tighten monetary policy. While the central bank is unlikely to lift interest rates from record lows, the market expects the central bank to extend its control over the yield curve even further after December’s surprise move. .
The yen’s depreciation also spurred inflation in Japan as the gap between domestic and international interest rates pushed traders toward higher-yielding currencies. The yen has recouped some of his 2022 losses, but is still at relatively weak levels.
Consumer price index inflation is now double the BOJ’s annual target of 2%, and the BOJ expects it to continue rising in the short term. Policy makers were divided on whether he could hit the 2% target, according to a summary of the Bank of Japan’s recent meeting.
High inflation is expected to further weigh on Japan’s economy after it hits in the third quarter.