Energy and Weak Yen Boost Inflation in Japan

Japan’s consumer prices rose for the third month in a row in August, a boost for policymakers as they attempt to end years of deflation or falling prices.

Consumer prices, excluding food, rose 0.8% from a year earlier.

The growth was mainly stoked by energy costs. Japan has been relying heavily on imports to meet energy demand after all its nuclear reactors were shut.

But a weakening yen, which has fallen nearly 25% against the US dollar since November, has made imports more costly.

The yen’s decline has been triggered mainly by the aggressive policies unveiled by the new government, which includes a 2% inflation target, to try and revive the Japanese economy,

According to the statistical bureau’s latest data, fuel, light and water prices rose 6% in August, from a year earlier.

If food and fuel are taken out, consumer prices actually fell 0.1% from a year ago.

via BBC

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