Core inflation falls in Japan

The annual increase in consumer prices excluding fresh food in Japan fell to 3.1 percent in July, in line with economists’ expectations. While the inflation data for July in Japan was in line with economists’ expectations, it displayed a more permanent outlook than central bank officials implementing an ultra-loose monetary policy had expected. The annual headline inflation in the country was recorded as 3.3 percent in July. This was also the expectation of economists participating in the Bloomberg survey. Annual inflation had also been 3.3 percent in June. The decline in the index excluding fresh food within the scope of core indicators drew attention. Japan’s core inflation for July fell from 3.3 percent to 3.1 percent, in line with economists’ expectations. Consumer prices excluding fresh food and energy increased by 4.3 percent annually in July. Economists’ expectations were that the increase would be at this rate. Consumer inflation excluding fresh food and energy had been 4.2 percent annually in June. Annual inflation in the service sector was one of the prominent elements in Japanese inflation data. Service inflation in the country rose to 2 percent in July. Thus, for the first time in 30 years, services inflation reached 2 percent.