Japan's core inflation slows below 3% for first time in over a year
TOKYO -Japan's core inflation in September slowed below the 3% threshold for the first time in over a year but stayed above the central bank target, keeping alive expectations that policymakers will phase out ultra-easy monetary policy.
The core consumer price index , which excludes volatile fresh food costs, rose 2.8% in September from a year earlier, government data showed on Friday, slightly exceeding a median market forecast for a 2.7% gain but easing from 3.1% in August. The core-core index, which strips away fresh food and fuel costs and is closely watched by the BOJ as a better gauge of trend inflation, rose 4.2% in September from a year earlier, slowing from a 4.3% gain in August.
Markets are rife with speculation the BOJ will soon end negative short-term interest rates and yield curve control, which sets a 0% cap for theThe BOJ has played down the near-term chance of phasing out its massive stimulus, arguing the recent cost-driven price rises need to change into demand-driven increases in inflation for the bank to consider hiking interest rates.
In a quarterly meeting on Thursday, some BOJ regional branch managers said consumers are becoming more sensitive to price hikes and buying less items at supermarkets.
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