Core inflation in Tokyo accelerated for the third consecutive month in August, with the consumer price index excluding fresh food rising 1.8% year-on-year, up from 1.7% in July and in line with analyst expectations. The figure, which is a leading indicator of nationwide inflation trends, supports the Bank of Japan's rate hike at its September meeting. The index excluding fresh food and energy rose 2%, while the overall CPI increased 1.9%. The main drivers of inflation were prices of durable goods related to education and recreation, as well as medical care costs. Despite Prime Minister Sanae Takaichi's efforts to reduce the cost-of-living burden, continued price increases and a persistently weak yen further increase the likelihood that the BOJ will raise rates as soon as next month.
Tokyo inflation accelerates, supporting BOJ rate hike, which pushes yields up.
