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BOJ says fuel, food-driven gains to keep propping up Japan inflation

Pumps are seen at a Showa Shell Sekiyu fuel station in Tokyo, Japan, November 11, 2015. REUTERS/Yuya Shino/Information

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TOKYO, Could 2 (Reuters) – Japan’s shopper inflation will proceed to face upward stress later this yr from rising electrical energy payments and meals costs, because the current surge in commodity costs hits the financial system with a lag, the central financial institution stated on Monday.

As Japanese utilities set electrical energy payments based mostly on the typical import price a number of months earlier than, the upward stress from rising power prices will proceed to prop up shopper inflation within the second half of the fiscal yr that started in April, the Financial institution of Japan (BOJ) stated.

The current rise in enter prices might additionally enhance meals costs additional as extra corporations go on prices to households, the BOJ stated within the full model of its quarterly outlook report.

Japan’s core shopper costs rose on the quickest tempo in additional than two years in March, elevating worries increased power and meals prices might more and more take a toll on households’ buying energy. learn extra

In an overview of the report launched on Thursday, the central financial institution revised up this fiscal yr’s inflation forecast however projected value development to reasonable within the following yr because the affect of current gasoline value good points dissipate.

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Reporting by Leika Kihara; Enhancing by Sam Holmes

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