Investing.com– Consumer price index inflation in Japan’s capital showed limited signs of growth in July, offering up mixed signs on price growth ahead of a Bank of Japan meeting next week, where the central bank could raise interest rates.
, which excludes volatile fresh food prices, rose to 2.2% year-on-year in July from 2.1% in the prior month, as expected, government data showed on Friday.
A core reading that excludes both fresh food and energy costs slid to 1.5% in July from 1.8%. The reading is closely watched by the BOJ as a gauge of underlying inflation, and sank further below the BOJ’s 2% annual target- a trend that could delay any potential rate hikes.
grew 2.2% in July, slightly missing expectations that it would remain steady at 2.3%.
Tokyo CPI inflation data usually heralds a similar reading from nationwide inflation, which is due later in July. While Japanese inflation has picked up over the past few months, amid support from increased wages, it remains unclear whether the trend gives the BOJ enough headroom to raise interest rates further.
Some analysts have penciled in a 10 basis point hike by the , although the bank has given no such indication.
The bank had hiked rates for the first time in 17 years in March, bringing them out of negative territory. But future hikes came into question as the Japanese economy showed more signs of weakness.