This photo taken on September 17, 2022 shows people shopping at a clothing store in the Motomachi shopping street in Yokohama, Kanagawa prefecture, south of Tokyo. – Inflation in Japan hit 2.8 percent in August, the highest level since 2014, government data showed on September 20, 2022 as soaring energy prices bite. (Photo by Richard A. Brooks / AFP)
TOKYO, Japan (AFP) — Inflation in Japan hit 2.8 percent in August, the highest level since 2014, government data showed Tuesday, as soaring energy prices bite.
The last time such figures were seen, prices had been artificially bolstered by an increase in VAT. Excluding years when tax hikes impacted the rate, August’s inflation was the fastest pace in nearly 31 years.
Data from the internal affairs ministry showed electricity, gas and petrol were among the key contributors to rising prices.
The figure for August was slightly above the 2.7 percent consensus forecast by experts, and comes on the heels of a 2.4 percent rise in July.
It comes ahead of this week’s meeting of the Bank of Japan, which has bucked the trend of peers elsewhere and stuck with its ultra-loose monetary policy.
Other central banks have opted to hike interest rates to fight soaring inflation, but the BoJ views the current price increases as temporary and linked to exceptional events such as the war in Ukraine.
The growing gulf between the bank’s policy and rate hikes elsewhere has caused the yen to slump, reaching a decades-low level against the dollar.
The BoJ’s longstanding target is for sustained two percent inflation, which it views as necessary to turbocharge the world’s third-largest economy.
© Agence France-Presse