Inflation in Japan accelerated sharply in September, official data showed today, rising above the Bank of Japan’s target level and paving the way for a further interest rate hike.<\/p>\n
The acceleration was driven in particular by rising prices for processed foods against a backdrop of soaring energy costs due to conflict in the Middle East.<\/p>\n
Excluding volatile fresh produce, inflation was 2.1%, up from 1.7% in August, according to the internal affairs ministry reading.<\/p>\n
The figure was in line with market expectations and above the 2% target set by the central bank, further raising chances of an interest rate hike.<\/p>\n
“With underlying inflation back above the Bank of Japan’s 2% target, the case for further tightening remains on solid ground,” said Abhijit Surya of Capital Economics.<\/p>\n
“News reports suggest that the Bank may revise up its inflation forecasts at its October meeting. That should set the stage for another hike in December,” he added.<\/p>\n
The Bank of Japan already raised interest rates in mid-September, in line with other major central banks around the world, in an effort to counter strong inflationary pressures driven by soaring energy prices triggered by the Iran war.<\/p>\n
A weak yen is also driving up the price of imported goods.<\/p>\n
Rents and car-related costs also contributed to inflation, the data showed.<\/p>\n
Surya of Capital Economics said rent inflation matched “its highest rate in nearly 25 years”.<\/p>\n
But government support for gasoline and electricity fees mitigated the impact on energy prices, according to the Internal Affairs ministry.<\/p>\n
Excluding both food and energy, inflation stood at 2.4% above market expectations, following a figure of 1.9% in August.<\/p>\n
Japan’s government is trying to mitigate the impact of inflation on household purchasing power, notably with a massive stimulus package adopted at the end of 2025 and extensive tax breaks on energy.<\/p>\n
Prime Minister Sanae Takaichi’s two predecessors were undone by anger over inflation.<\/p>\n
The government said it would slash consumption tax on food products from 8% to 1% for two years, starting in April.<\/p>\n
However media reports said this will cost the government 10 trillion yen ($63 billion) in lost tax revenues.<\/p>\n
This has exacerbated concerns about Japanese public finances, with the country’s debts more than double annual economic output, one of the highest ratios in the world.<\/p>\n
Resource-poor Japan is extremely dependent on oil imports.<\/p>\n","protected":false},"excerpt":{"rendered":"Inflation in Japan accelerated sharply in September, official data showed today, rising above the Bank of Japan’s target…\n","protected":false},"author":2,"featured_media":662984,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-662983","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/662983","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=662983"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/662983\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/662984"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=662983"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=662983"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=662983"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}