Tokyo – A Reuters poll released on Friday indicates that Japan’s core consumer price index (CPI) is likely to have stayed steady at 1.8% in August compared with a year earlier. The figure includes energy items but excludes fresh food, and it matches the July reading, keeping inflation comfortably under the Bank of Japan’s 2% goal.
Poll details and analyst commentary
The poll surveyed 16 economists who specialize in Japanese macro‑economics. All respondents expect the August core CPI to be unchanged from July, suggesting that the recent surge in global oil prices has been largely offset by domestic policy measures.
Ryohei Ikeda, an analyst at Mizuho Research Institute, explained, “Higher crude oil and naphtha prices are increasingly being passed on to consumer prices, especially for daily necessities, which will push inflation upward. However, subsidies for electricity and gas bills will act as a factor pushing inflation downward.”
Wholesale price pressure and currency effects
Separate data released on the same day showed Japan’s wholesale prices rising 7.6% year‑over‑year in August, indicating that price pressures remain at the producer level. The rise reflects higher fuel costs and increased import prices, a situation aggravated by the weak yen.
Oil benchmarks were on track to close the week above $100 a barrel for the first time since mid‑May, adding further cost pressure to the Japanese economy.
Implications for monetary policy
Analysts polled by Reuters anticipate that the Bank of Japan (BOJ) will raise its policy rate to 1.25% during a two‑day meeting that ends next Friday. The expected hike reflects ongoing concerns about broader price pressures and the yen’s depreciation.
The Ministry of Internal Affairs and Communications is scheduled to publish the official CPI figures at 8:30 a.m. on Friday, September 18 (2330 GMT on September 17).
What this means for households
For Japanese families, the steady core inflation rate suggests that the government’s subsidy programs for electricity and gas are helping to cushion the impact of higher energy costs. While wholesale price growth signals that producers are feeling the strain, the unchanged consumer‑price trajectory offers some relief to households budgeting for everyday expenses.
Economists will be watching the upcoming BOJ decision closely, as any further rate adjustments could influence borrowing costs, mortgage rates, and the broader outlook for Japan’s recovery.
Looking ahead
Future inflation trends will depend on the trajectory of global oil markets, the strength of the yen, and the effectiveness of fiscal measures aimed at supporting households. The next set of CPI data, due in mid‑September, will provide a clearer picture of whether the current balance between upward price pressures and government subsidies can be maintained.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
