Japan inflation eases to 3.1%

TOKYO: Japan’s consumer price inflation eased to 3.1 percent year on year in July, in line with market expectations, government data showed on Friday.

The figure for the world’s third-largest economy, which excludes volatile fresh food prices, followed a 3.3-percent reading in June.

Stripping out fresh food and energy, Japan’s prices rose 4.3 percent, data published by the internal affairs ministry showed.

Friday’s core consumer price index figure matched market expectations of 3.1 percent recorded in a Bloomberg survey.

Prices for processed food, telecommunication costs and hotel rates rose while electricity bills declined.

Inflation in Japan has been less extreme than price hikes seen in other major economies such as the United States, which have been fueled by the war in Ukraine and supply chain disruptions.

The Bank of Japan’s (BoJ) 2-percent inflation target has been surpassed every month for more than a year.

But the central bank sees recent price increases as driven by temporary factors, and so has stuck to its easing policies such as maintaining a negative interest rate.

Last month, the BoJ said it will allow “greater flexibility” in controlling bond yields, as it raised its full-year inflation forecast to 2.5 percent from its previous estimate of 1.8 percent.

The BoJ took a similar measure in December when it expanded the so-called yield curve control range for government bonds to around plus or minus 0.5 percentage point, from a tighter range of plus or minus 0.25 percentage point.