Tokyo Core Consumer Prices Rise 3.4%... "Highest in 40 Years"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] The core Consumer Price Index (CPI) for Tokyo, Japan, excluding fresh food, in October reached its highest level in 40 years due to the surge in raw material prices and the depreciation of the yen.

According to the Tokyo Metropolitan Government's announcement on the 28th, the core CPI for the 23 wards of Tokyo in October rose 3.4% compared to the same month last year. This exceeded the market expectation (3.1%) and surpassed the Bank of Japan (BOJ)'s inflation target of 2% for the fifth consecutive month. Excluding the impact of the consumption tax rate increase, this is the highest rate of increase in 40 years and 4 months since June 1982.

Energy and food prices drove the inflation. Energy prices rose 24.2%, raising the overall inflation rate by 1.2 percentage points. Electricity and city gas charges increased by 26.9% and 29.3%, respectively. Gasoline prices rose 2.0%, with the price increase narrowing compared to the previous month (5.8%) due to the effect of government price suppression subsidies.

Food prices increased by 6.1%, contributing 1.55 percentage points to the overall inflation rate. This rise is analyzed to be due to changes in food transportation routes caused by the Russia-Ukraine war.

The mobile phone communication fee, which had fallen by 14.4% last month, turned positive this month with a 1.8% increase.

Japanese media forecast that the nationwide consumer price index will rise in October based on the fact that the 23 wards of Tokyo serve as a leading indicator of national consumer prices. The Nihon Keizai Shimbun predicted, "The nationwide consumer price index has a higher proportion of energy prices than the consumer price index of the 23 wards of Tokyo," and "Inflation is likely to accelerate further in October."

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