Japan August Consumer Prices Rise 2.8%... "Highest in 31 Years"

Japan Core Consumer Price Index Inflation Rate

[Asia Economy Reporter Lee Ji-eun] Japan's core Consumer Price Index (CPI) inflation rate has reached its highest level in 31 years.

On the 20th, Japan's Ministry of Internal Affairs and Communications announced that the core CPI for August, excluding volatile fresh food, was 102.5, marking a 2.8% increase compared to the same month last year. Excluding October 2014 (2.6%), when there was an impact from the consumption tax hike, this is the largest increase in 30 years and 11 months since September 1991 (2.8%).

The CPI has risen for 12 consecutive months, and the inflation rate has remained in the 2% range for five months. The 2% target is set by the Bank of Japan as the goal to curb inflation.

Energy and food prices have driven the price increases. Energy prices rose 16.9% year-on-year, surpassing the previous month's increase of 16.2%. Electricity rates increased by 21.5%, and city gas charges surged by 26.4%. Gasoline prices rose by only 6.9%, limited by government subsidies.

Food prices excluding fresh food rose 4.1%, exceeding the 3.7% increase in July. Prices rose significantly for prepared foods, grains, and snacks due to soaring raw material costs and logistics transportation expenses. Price increases for household durable goods such as air conditioners were also notable.

The weak yen also contributed to the inflation. As of that day, the yen exchange rate in the Tokyo foreign exchange market was trading at 143.02. The yen exchange rate traded in the 115 yen range at the beginning of this year but broke through the lowest level recorded in 2015 (125.86) following the U.S. Federal Reserve's rate hike in April, the first in three years. On the 14th, the yen exchange rate nearly reached the 145 yen level.

The core-core CPI, excluding fresh food and energy, rose 1.6%.

This content was produced with the assistance of AI translation services.