Accelerating inflation in Japan

In Japan, an acceleration trend in headline and core inflation in June was striking. June data in Japan gave upward signals in inflation. In Japan, where an ultra-loose monetary policy is being implemented, headline inflation also increased in June. According to the data, annual inflation in Japan was recorded as 3.3 percent in June. Economists participating in the Bloomberg survey expected inflation to be 3.2 percent. Inflation in the country had been 3.2 percent in May. A limited pullback was observed in core inflation. In June, the annual increase in prices excluding fresh food and energy in Japan was 4.2 percent. The annual increase in this group was 4.3 percent the previous month. Although inflation is accelerating, the messages from the monetary policy authority indicate that easing will continue. Bank of Japan (BOJ) Governor Kazuo Ueda signaled that the bank will not abandon monetary easing without changing its guidance on inflation targeting. Ueda, who held a press conference in India on Tuesday where G-20 finance ministers and central bank governors were meeting, said that if their assumption that inflation will not reach the 2% target in a sustainable manner does not change, the general approach to monetary policy, namely easing policies, will not change either. Ueda, who said the BOJ will evaluate Japan’s progress in achieving the 2% inflation target in a sustainable manner at every policy meeting, said: “We have patiently maintained our ultra-loose monetary policy under yield curve control (YCC).”