Japan’s core consumer price index rose 3.6% in October to its highest level in 40 years. This is due to the weaker yen and higher import costs as the central bank maintains its accommodative monetary policy.
The nationwide core consumer price index (CPI), excluding volatile fresh food, topped the Bank of Japan’s (BOJ) target of 2% for the seventh straight month, according to Kyodo News. report.
This is the highest rate of increase in Japan’s consumer price index since the Middle East crisis in 1982, when crude oil supplies were disrupted by the Iran-Iraq War. However, the Bank of Japan sees recent inflation as temporary and will improve in the next fiscal year.
Bank of Japan Governor Haruhiko Kuroda has reiterated that the central bank’s accommodative monetary policy must be maintained to support the Japanese economy and achieve price stability.
The Bank of Japan keeps long-term interest rates around zero and short-term interest rates at minus 0.1%.
“At this point, we cannot say that the 2% price stability target has been achieved stably and sustainably along with wage growth. The governor said in parliament.
Higher raw material prices and a weaker yen pushed energy costs up 15.2%, while food, excluding perishables, rose 5.9%, the fastest rise since 1981, according to government data.
Food prices rose 88% year-on-year, mainly for alcoholic beverages. Durable household goods prices rose 11.8% due to higher raw material prices and a weaker currency.
economy package
Japanese Prime Minister Fumio Kishida said in October that the Japanese government would spend 71.6 trillion yen ($485 billion) on economic stimulus to help households and businesses cope with inflationary pressures amid a weaker currency. rice field.
Mr Kishida said the economic stimulus package is expected to boost Japan’s GDP by 4.6% and reduce consumer prices by 1.2% over the next year.
This includes a 29.1 trillion yen ($200 billion) supplementary budget to expand support for households and reduce utility bills. Kishida said his government would also provide his 100,000 yen ($680) for each pregnant woman.
“We are targeting energy prices, which have been a major driver of recent inflation, and are curbing price increases in a visible way,” he said at a press conference.
Of the total stimulus package, Kishida said the government would set aside 6 trillion yen ($40.7 billion) for energy-related measures and provide support worth 45,000 yen ($305) to each household.
Reuters contributed to this report.
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Aldgra Fredly is a Malaysia-based freelance writer covering Asia Pacific news for The Epoch Times.