The price of imported goods has increased due to a depreciating yen.
According to government data released on Friday, the weak national currency and pressure from imported costs caused Japan’s consumer price growth to accelerate to a 40-year high in October.
The national core consumer price index (CPI) increased 3.6% from a year earlier, marking the fastest rate of growth since 1982, according to the report. The increase last month was greater than both the 3% gain in September and the economists’ forecast of a 3.5% increase.
The increase in the index, which includes oil products but excludes volatile fresh food prices, demonstrated that inflation remained above the Bank of Japan’s (BOJ) target of 2% for a seventh consecutive month.
According to the report, foreign supply shortages have raised the cost of imported goods like food, industrial commodities, and manufacturing components. The problems have been made worse by a decline in the national currency, the yen, which is down more than 20% this year in dollar terms.
A year ago, 406 of the 522 items that make up the CPI were more expensive in October. 385 people were involved in September.
Food prices, excluding perishables, rose by 5.9%, which was the fastest increase in four decades, while energy prices in the nation increased by 15.2%.
Food prices increased by 88% over the previous year, with alcoholic beverages like beer and sake leading the way. The cost of durable goods for the home increased by 11.8%, which is the highest increase since March 1975.
The BOJ has predicted that average prices will rise by 3% from the fiscal year ending March 2021 to the one beginning March 2023, but only by a factor of two in 2023–2024.
The regulator promised to maintain monetary stimulus on Thursday to achieve sustainable and stable inflation as well as wage growth. It will maintain short-term rates at -0.1% and long-term rates close to zero.
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