Forbes Middle East: Japan’s core consumer price index (CPI), which excludes fresh food items, increased for the third month in a row to 2.7% in July 2024.

Inflation up

• The country’s core CPI growth for June was at 2.6%, according to data released by the Statistics Bureau of Japan.
• The core inflation for July met the median market projection although the Bank of Japan (BoJ) set its inflation target at 2% target.
• Japan’s “core core” inflation index, which excludes fresh food and energy prices and is carefully monitored by the BoJ as an important indicator of wider inflation trends, climbed 1.9% after rising by 2.2% in June, said a Reuters report on Friday.
• This specific measure of the country’s inflation fell below the 2% mark for the first time since September 2022.
• “The increase in the core CPI reflected a phase-out of government subsidies to curb household utility bills, and with that factor excluded, the overall inflation has been slowing,” Masato Koike, a senior economist at Sompo Institute Plus, told Reuters.
• He added that core CPI growth is “likely to slow down hereafter,” with citizens being granted utility relief and in the wake of the recovering Japanese yen driving down import costs.

Japanese economy

The Japanese economy rebounded in the second quarter of 2024, growing by 3.1% year-on-year due to robust consumption levels, as per official data released earlier this month.

Its gross domestic product (GDP) also expanded by 0.8% quarter-on-quarter during the three months ended June 30, against the 0.6% contraction in the January–March quarter.

Japan’s private consumption, which makes up more than half of the economic output, increased by 1% to break the streak of declining consumption levels recorded for the past four quarters.

In July, the country’s factory industry marginally declined amid a drop in production levels and new orders, hit by consistently high costs.

The au Jibun Bank flas Japan manufacturing purchasing managers’ index (PMI) fell to 49.2 in July from 50 in June, dipping 0.8 basis points below the threshold that separates growth from contraction.

Forbes Middle East