Japanese consumer price index inflation rose as expected in August amid a sustained pick-up in consumption on higher wages, with the reading coming just before a Bank of Japan meeting later in the day.
Core CPI, which excludes volatile fresh food prices, rose 2.8% year-on-year to a 10-month high in August, government data showed on Friday. The reading was in line with expectations and picked up from the 2.7% seen in the prior month.
A core reading that excludes both fresh food and energy prices, and is watched closely by the BOJ as a gauge of underlying inflation, rose to 2% in August from 1.9% in the prior month.
Headline CPI inflation rose to 3% in August from 2.8% in the prior month, hitting a 10-month high.
Friday’s reading comes just before the conclusion of a BOJ meeting, and ties further into the central bank’s forecast that inflation will pick up in tandem with higher wages and improved private consumption.
Underlying inflation also rose to the BOJ’s 2% annual target in August.
The central bank is widely expected to keep interest rates unchanged later on Friday, but is expected to eventually hike rates further on a forecast that inflation will pick up in the coming months and going into 2025.
The uptick in inflation comes on the back of bumper wage hikes won by Japanese labor unions earlier this year- the effects of which are now being felt across the country.
