Japanese inflation has not exceeded the 2% barrier since March 2015, when prices were still adjusting to the first VAT increase in the country in 17 years
The consumer price index (CPI) of Japan rose 2.1% year-on-year in April, exceeding the elusive Bank of Japan (BoJ) inflation target for the first time in 7 yearsdue to higher energy prices and other raw materials.
The indicator, which excludes food prices due to its high volatility, increased in April for the eighth consecutive month, according to data published this Friday by the Ministry of the Interior, in light of the persistent inflationary pressure due to the rising fuel and other materials.
The archipelago, highly dependent on imports, has also seen import costs rise not only due to the global rise in prices, but also due to a recent strong devaluation of the yen that is making its purchases considerably more expensive.
Japanese inflation did not exceed the 2% barrier, the BoJ’s elusive goal, since March 2015, when prices were still adjusting to the first VAT increase in the country in 17 years, which went from 5 to 8% in April 2014.
The 2.1% year-on-year rise in prices in April this year continues to rise 0.8% experienced by the CPI in March.
Month-on-month, prices rose 0.4% in Japan in the fourth month of 2022.
The rise in energy prices, of 19.1% year-on-year, was the factor that most contributed to the rise in the CPI, followed by the increase in the cost of durable recreational goods, of 4.5%.
Among the sectors that experienced a drop in prices in April, that of the communication, 10.9% year-on-year.
In 2013, the Japanese central bank launched a broad program of monetary easing to bring inflation to 2%, although this objective was successively delayed.
The BoJ, which has already indicated that inflation could shoot up to its goal soon, has chosen to maintain its policy, contrary to that of other entities such as the United States or the European, alleging that the rise in prices is a product of the geopolitical situation.
The Russo-Ukrainian war has caused a rise in energy imports and other materials and the covid-19 pandemic continues to wreak havoc on supply chains.
In this context, the entity considers that the current price rise does not respond to a rate of wage increases at the national level that can sustain internal demand, still fragile, and that maintains inflation in a stable and sustainable manner.