Tokyo Inflation Remains Steady as Core CPI Falls

Tokyo's Consumer Price Index (CPI) remained steady in August, with a year-on-year increase of 1.8%, according to data released by the Statistics Bureau on Friday.

This reading was in line with expectations and largely unchanged from the previous month's revised figure of 1.7%. The core CPI, which excludes volatile fresh food prices, fell to 1.9% in August from 2.0% in the prior month.

The decline in inflation was driven by a stronger Japanese yen, which resulted from joint intervention by the US and Japan in currency markets. This led to lower import costs, but overall Japanese inflation remains sticky, with food and living costs continuing to rise.

Government subsidies on consumer fuel and gas prices helped limit the inflationary effects of surging global oil prices due to the Iran conflict. However, rising energy costs are expected to trickle back into CPI inflation as producer price index inflation rose sharply in recent months.