Arabic version: التضخم الأساسي في اليابان يبلغ 2.1% في سبتمبر

According to Cnbc, Japan’s core inflation, excluding fresh food prices, accelerated to 2.1% in September from 1.7% in the previous month. The reading was the highest this year and was in line with economists’ estimates in a Reuters poll. Headline inflation was also 2.1%, while core-core inflation, which excludes fresh food and energy and is the Bank of Japan’s preferred gauge, stood at 2.4%.

The increase was linked to higher prices for durable goods and public-utility charges, government data showed. Services inflation rose slightly to 1.5% from 1.2%. Abhijit Surya, senior APAC economist at Capital Economics, said the acceleration was notable because it came despite a sharp slowdown in fresh-food inflation and continued energy deflation.

Rice prices fell 20.6% year on year, but overall goods inflation rose to 2.8% from 2.6% in August. Surya said indirect effects from the energy shock may still be feeding through the economy, with inflation in “other industrial products” reaching a 13-month high of 3.9%. Consumer energy prices fell 0.6% in September, with subsidies from the Takaichi administration contributing to declines so far this year.

Higher inflation could strengthen the case for another Bank of Japan rate increase this year. The central bank raised rates by 25 basis points in September, taking them to a three-decade high of 1.25%. Surya forecast another increase in December, saying underlying inflation had moved back above the bank’s 2% target.

Japan’s Lower House began debating a bill Tuesday that would reduce the consumption tax on food to 1% from 8% for two years, NHK reported. The proposal also includes support payments to workers based on income levels. Finance Minister Satsuki Katayama said Japan was close to sustained inflation driven by rising wages, while acknowledging the contribution of higher import costs.