Japan core consumer prices increase 3.4 per cent in April

Inflation in Japan accelerated again in April, with core consumer prices rising 3.4 per cent from a year earlier, with consumers taking a fresh blow as food and durable goods prices jumped, government data showed yesterday.

The rise in the core consumer price index, excluding volatile fresh food items, remained above the Bank of Japan's 2 per cent target for the 13th consecutive month, putting further pressure on the central bank to tweak its ultralow rate policy. The key gauge of inflation gained 3.1 per cent in March.

Core-core CPI, which strips away energy and fresh food prices, climbed 4.1 per cent, the highest since 1981, providing evidence that inflationary pressure is persisting, data from the Ministry of Internal Affairs and Communications showed.

Among notable gainers, food prices rose at the fastest pace in nearly 47 years, up 9.0 per cent. Durable goods prices leapt 9.8 per cent.

Energy prices fell 4.4 per cent, with kerosene, gasoline and electricity bills pushed lower by government subsidies which pushed core CPI down by around 1 percentage point.

The BOJ believes the pace of gain in the inflation rate, pushed up for months by surging import costs of energy and raw materials, will start to slow later this year.

Rising prices of everyday goods are already hurting consumer sentiment, but private consumption remains resilient because of pent-up demand, especially for services following the lifting of COVID-19 restrictions, economists said.

The rise in the core consumer price index, excluding volatile fresh food items, remained above the Bank of Japan's 2 per cent target for the 13th consecutive month, putting further pressure on the central bank to tweak its ultralow rate policy.