Japan's core consumer prices slowed in July, supporting expectations the Bank of Japan (BOJ) will be in no rush to phase out monetary easing, even as inflation remains stubbornly above the central bank's target.
The 3.1% rise in the core consumer price index , which includes oil products but excludes volatile fresh food prices, matched a median market forecast, following a 3.3% increase in the previous month. It held above the BOJ's 2% inflation target for the 16th straight month.
Still, analysts say an acceleration in service-led inflation is a positive sign that demand-side inflation, which the BOJ is looking to stoke, may be building. "With unit labour costs barely rising and consumer spending starting to falter as real incomes are falling sharply, we doubt that it will," said Ng.
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