Japanese inflation cooled for a second month but remained above the Bank of Japan’s price target, as the recent depreciation of the yen fuels concerns that cost-pushing inflationary pressures may be here to stay.
Consumer prices excluding fresh food rose 2.2% in April from a year earlier, the Interior Ministry said on Friday. The figures were in line with analyst estimates. The indicator remained at or above the BOJ’s 2% target for a 25th month.
The biggest factor weighing on the index was a slowdown in processed food price increases, which slowed to 3.5%, partly due to base effects after those prices rose a year earlier, a sign that companies were increasingly willing to passing on rising costs to consumers. Housing costs also rose at a slower pace, negatively impacting overall levels.
