Japan Inflation Rate Unexpectedly Climbs to 4-Month High

Japan's consumer price inflation rose to 0.9 percent year-on-year in July 2018 from 0.7 percent in the previous month and far above market consensus of 0.4 percent. It was the highest rate since March, mainly due to a jump in food prices.

Prices of food increased by 1.4 percent from a year earlier in July, much faster than a 0.4 percent rise in June. It was the highest food inflation in four months, mainly boosted by prices of meals outside the home (1 percent vs 0.9 percent in June); cooked food (0.5 percent vs 0.3 percent); vegetables & seaweeds (4.3 percent vs -1.1 percent), of which fresh vegetables (4.4 percent vs -4 percent); cereals (1.9 percent vs 1.6 percent); fish & seafood (3.9 percent vs 3.2 percent), of which fresh fish & seafood (4 percent vs 2.7 percent); meats (0.2 percent vs 0.1 percent); dairy products & eggs (3.1 percent vs 2.9 percent); and fresh fruits (4.6 percent vs -1.3 percent).

Additional upward pressure came from: transportation & communication (1.5 percent vs 1.4 percent), culture & recreation (0.6 percent vs 0.8 percent); fuel, light & water charges (3.1 percent vs 3.3 percent), of which electricity (2.5 percent vs 3.1 percent); miscellaneous (0.3 percent vs 0.4 percent); medical care (2 percent, the same as in June); clothes & footwear (0.3 percent vs flat reading); and education (0.5 percent, the same as in June). At the same time, cost continued to fall for housing (-0.1 percent, the same as in June); and furniture and household utensils (-1.1 percent vs -1 percent).

Core inflation rate, which excludes fresh food, came in at 0.8 percent in July, unchanged from the previous month's three-month high but slightly below estimates of 0.9 percent.

On a monthly basis, consumer prices went up by 0.3 percent in July, after a 0.1 percent rise in June and reaching the highest monthly figure since January.

Japan Inflation Rate Unexpectedly Climbs to 4-Month High

Statistics Japan | Rida | rida@tradingeconomics.com
8/24/2018 9:53:33 AM