TOKYO (Kyodo) -- Core consumer prices in Tokyo rose 4.3 percent from a year earlier in January, hitting the highest level in nearly 42 years, as widespread price hikes in food, energy and other items deal a blow to households, government data showed Friday.
The core consumer price index, excluding volatile fresh food items, for the Japanese capital remained above the Bank of Japan's 2 percent inflation target for the eighth straight month and adds pressure on the central bank to tighten monetary policy. The pace of increase accelerated from last month when the inflation rate was 3.9 percent.
Core CPI for Tokyo, seen as an indicator of what to expect nationwide, was up for the 17th straight month and marked the highest since a 4.3 percent rise in May 1981, the Ministry of Internal Affairs and Communications said.
Ideas:
Most likely those how live in Tokyo and surrounding areas also have the highest salaries in Japan. But even though they have high salaries there must be a considerable number in Tokyo who are feeling the inflation challenge.
By now consumers must be thinking when is inflation going to decrease or at least level off as it seems there is no end in sight for the Japanese economy and price hikes.
As long as there are no wage hikes consumers have no choice but to reduce their extra income or disposable income spending which is not good for the Japanese economy.
But the Bank of Japan most likely is not going to do much as they to feel that the current strategy is the best strategy for now.
Article:
An increasing number of companies have been passing on higher costs of energy and raw materials, stemming from Russia's war in Ukraine and the depreciation of the yen, to consumers in recent months.
In the reporting month, the prices of food other than perishables and of energy costs rose 7.4 percent and 26.0 percent from a year earlier, respectively. City gas surged 39.7 percent and electricity was up 24.6 percent.
The overall gain in core CPI came despite lower accommodation prices which fell 2.8 percent amid the government's subsidy program aimed to boost the tourism sector.
Ideas:
If the yen was a normal level, its possible the higher costs that companies are passing on to the next in the supply chain, but unfortunately the weak yen makes the energy and raw material costs even more as now imports prices become higher with a weak yen.
The Bank of Japan has got to be under a lot of pressure to decrease inflation but the BOJ doesn't seem to be worried about it too much.
But of course consumers are feeling it everyday and having to live through it while the BOJ seems to think the current inflation is only temporary situation.
Article:
At the latest monetary policy meeting in mid-January, the BOJ left its ultralow rate policy unchanged, a month after its surprise decision to raise its ceiling on the 10-year yield to 0.5 percent from 0.25 percent, a move considered an effective interest rate hike.
It says ultralow rates are still needed to prompt companies to raise wages and to spur stronger demand to support price increases.
Ideas:
Some companies might increase wages while some companies probably can't such as small and medium sized companies who don't have the needed profit margins to increase wages for their employees.
Some have said the ultralow strategy used by companies is a strategy that is an incentive for companies to "use their money/savings or lost their money" strategy as the low rates also involve company bank accounts too.
But companies for now have not responded the the strategy used by the Bank of Japan.
Only time will tell if companies will increase wages in April for their workers.
Have a nice day and be safe!
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