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Japan Inflation Slows to 2% in January - News

2024-02-27T08:04:35.699Z

Highlights: Japan Inflation Slows to 2% in January - News.com.au. In January the consumer price index stood at 2%, following the 2.3% increase recorded in December. The last time the index was below the BoJ's 2% inflation target was in March 2022, when prices rose 0.8% year-on-year. Unlike the main central banks who have raised interest rates - and could soon start reducing them again - BoJ has maintained its accommodative policy, putting pressure on the yen.


Inflation in Japan slows down for the third consecutive month, although slightly above the estimates of economists who expected a value lower than the Central Bank's (BoJ) target. (HANDLE)


Inflation in Japan slows down for the third consecutive month, although slightly above the estimates of economists who expected a value lower than the Central Bank's (BoJ) target.

According to government data, in January the consumer price index stood at 2%, following the 2.3% increase recorded in December;

a dynamic that according to analysts could lead to a progressive easing of the ultra-expansive policy of the central institution and the gradual abandonment of negative interest rates.

The last time the index was below the BoJ's 2% inflation target was in March 2022, when prices rose 0.8% year-on-year.

Since then, inflation rose to 4.2% in January 2023, before gradually reducing at the end of last year.

Unlike the main central banks who have raised interest rates - and could soon start reducing them again - the BoJ has maintained its accommodative policy, putting pressure on the yen.

Governor Kazuo Ueda believes that the rise in inflation is driven by temporary factors, including rising energy costs, and anticipates an alignment of prices in line with the improvement in wages.

In the last three months of 2023, the Japanese economy surprisingly entered a technical recession, with domestic consumption continuing to remain weak.

GDP recorded a contraction of 0.1%, from -0.7% in the previous quarter, while on a trend basis gross domestic product saw a decline of 0.4%.


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Source: ansa

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