Japan's core consumer prices rose 2.1 percent in September compared to the same month last year, marking the first time in nine months that inflation has surpassed the Bank of Japan's 2 percent target. The increase, reported by the Ministry of Internal Affairs and Communications, was driven by higher prices for food and water bills, accelerating from a 1.7 percent rise in August.
The core-core consumer price index, which excludes both energy and fresh food, increased 2.4 percent, reflecting underlying price trends. The data comes as the Bank of Japan prepares for its two-day policy meeting next week, where it is expected to leave the key interest rate unchanged at 1.25 percent while assessing whether inflation has met its target.
Food prices, excluding fresh items, rose 2.9 percent, with restaurant meals climbing 2.5 percent due to higher raw material and labor costs. Imported beef prices surged 13.1 percent, partly due to drought in the United States, while rice prices plummeted 20.6 percent, the largest decline since 1970, due to growing inventories.
Nonfood items also saw price increases, with toilet paper prices rising 17.8 percent and household durable goods increasing 6.2 percent. Water charges climbed 4.9 percent, partly due to the end of a fee waiver program in Tokyo. Energy prices fell 0.6 percent, with gasoline and electricity bills dropping, though city gas prices rose 0.2 percent amid Middle East turmoil.
Takeshi Minami, chief economist at the Norinchukin Research Institute, noted that price increases have outpaced government efforts to curb inflation, citing higher raw material costs, yen depreciation, and wage growth as key factors. He suggested that the Bank of Japan may judge its inflation target as achieved.