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Investing.com-- Consumer price index inflation in Tokyo grew more than expected in October amid high food prices and strong private spending, while underlying inflation also rose further above the Bank of Japan’s annual target.
Core CPI– which excludes volatile fresh food prices– rose 2.8% year-on-year, government data showed on Friday. The print was higher than expectations of 2.6% and also picked up from the 2.5% seen in the prior month.
A core CPI reading that excludes both fresh food and energy prices rose to 2.8% from 2.5%, remaining well above the BOJ’s 2% target. The reading is closely watched as a measure of underlying inflation by the central bank.
Headline CPI inflation rose to 2.8% from 2.5%.
Friday’s data showed steady increases in food prices, with rice prices coming off highs seen earlier this year, but still remaining largely elevated. Spending on discretionary items also trended higher during the month.
The data comes just a day after the BOJ left interest rates unchanged and forecast some near-term cooling in inflation. But the BOJ also signaled that it will hike rates if economic growth and inflation rise in tandem with its forecasts.
Tokyo inflation usually acts as a bellwether for nationwide Japanese inflation, with Friday’s reading suggesting that Japanese CPI inflation picked up pace in October. Data last week showed nationwide inflation remained well above the BOJ’s target in September.