Tokyo inflation remains stagnant after Japan's October sales tax hike

By Yoshiyasu Shida and Leika Kihara TOKYO (Reuters) - Core consumer prices in Tokyo, a leading indicator of nationwide inflation, rose 0.5% in October from a year earlier, data showed on Tuesday, staying distant from the Bank of Japan's elusive 2% target and keeping it under pressure to ramp up stimulus.

Reuters October 29, 2019 07:06:28 IST
Tokyo inflation remains stagnant after Japan's October sales tax hike

Tokyo inflation remains stagnant after Japans October sales tax hike

By Yoshiyasu Shida and Leika Kihara

TOKYO (Reuters) - Core consumer prices in Tokyo, a leading indicator of nationwide inflation, rose 0.5% in October from a year earlier, data showed on Tuesday, staying distant from the Bank of Japan's elusive 2% target and keeping it under pressure to ramp up stimulus.

The data offered the first clue on how a sales tax hike that kicked off in October could affect price growth, which remains subdued despite years of heavy money printing by the Bank of Japan.

The rise in the core consumer price index (CPI) in the Japanese capital, which includes oil products but excludes fresh food prices, was slower than a median market estimate for a 0.7 percent gain.

Japan's government proceeded with a twice-delayed increase in the sales tax rate to 10% from 8% in October as part of efforts to rein in the country's huge public debt.

In forecasts made in July, the BOJ expects nationwide core consumer inflation to hit 1.0% in the current fiscal year ending in March 2020, including the effect of the higher tax.

The central bank is likely to trim the inflation forecast at a rate review on Thursday. But it is leaning toward keeping monetary policy steady as stable markets, a truce in U.S.-China trade talks and robust domestic demand give it room to save its dwindling ammunition, sources have told Reuters.

(Reporting by Leika Kihara; Editing by Shri Navaratnam)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.