Japan's Core Inflation Hits 1.8% Amid Weak Yen and Middle East Conflict
Japan's core inflation rate rose to 1.8% in July from June's 1.6%, according to official data released on Friday. This increase was driven by a weak yen, which pushes up prices for imported goods like oil and food.
The data, from the internal affairs ministry, also showed that inflation excluding food and energy prices rose to 1.9% in July from June's 1.7%. These numbers are in line with market expectations.
Prime Minister Sanae Takaichi has implemented fuel and energy subsidies to shield consumers from rising oil prices, which have been affected by the Middle East conflict. The Bank of Japan (BoJ) has hiked interest rates to a 31-year high in June and is expected to raise them again this year.
The BoJ's rate hike could potentially lift the yen, which has lost around half of its gains following a historic joint market intervention by the US and Japan last month.