Japan’s inflation has hit its highest level in 40 years as a weak yen pushed up commodity prices that were already high around the world.
Consumer price inflation, which excludes fresh food prices, rose 3.6 percent in October from a year earlier, the government showed on Friday, the fastest increase since 1982.
Although it is lower than the inflation rates seen in countries such as the United Kingdom and the United States, the increase in prices exceeds what the Bank of Japan wanted to increase the prices and follow the poor performance of the third largest economy in the world.
The Bank of Japan has defied the global trend of raising interest rates, with Governor Haruhiko Kuroda this week reiterating the need to maintain stimulus to support the country’s economic recovery from the COVID-19 pandemic. Kuroda has said that the inflation expectations are temporary and mainly due to international prices.
Economic data released earlier this week showed Japan’s economy unexpectedly shrank by 0.3 percent in the third quarter after three consecutive quarters of growth, while private consumption fell.
Japanese Prime Minister Fumio Kishida last month unveiled a $260bn stimulus program aimed at boosting the economy, including measures to help families cope with rising energy costs.
While the central bank’s loose policy has helped boost the profits of Japanese companies overseas by devaluing the yen, it has helped raise the cost of imports.
The Japanese currency fell to a 32-year low in October, hitting 151 yen to the US dollar, although it has recovered to around 140 yen since Friday.
