Japan’s core inflation rate rose to 4.2 percent in January, the highest level in nearly 40 years, compared to 4 percent in December.
This reading of the consumer price index (excluding fresh food) is the highest since 1981, although it was slightly lower than economists’ expectations of 4.3 percent.
According to Bloomberg, hotel prices and car insurance contributed to the increase in inflation in January, while energy prices slowed slightly.
High inflation rates point to the challenges awaiting Bank of Japan governor nominee Kazuo Ueda ahead of his first public appearance since being appointed by the government.
Over the past decade, outgoing Governor Haruhiko Kuroda has insisted that the Bank of Japan should continue its accommodative policy.
Experts and market participants expect a change in the Bank of Japan’s policy early in the term of the new governor, especially since prices are growing at more than double the level targeted by the central bank.