Consumer Price Inflation in Tokyo

TOKYO (Reuters) – Consumer price inflation in Japan’s capital Tokyo is expected to remain unchanged in August, according to a Reuters poll, suggesting no immediate rush for the central bank to raise rates.

The poll also indicated a probable rebound in factory output and continued growth in retail sales for July, highlighting the resilience of Japan’s economy following better-than-expected GDP data for April-June.

Tokyo’s core consumer price index (CPI) for August is anticipated to rise by 2.2% year-on-year, unchanged from July’s rate, based on a median forecast from 16 economists.

Analysts noted that decreases in gasoline and hotel accommodation costs, along with higher prices a year prior, likely offset increases in utility costs.

This moderation in Tokyo’s core CPI — a key indicator for nationwide inflation trends — could temper the Bank of Japan’s hawkish stance on monetary policy, particularly after the central bank raised its short-term policy rate to 0.25% in July.

Core CPI data will be available at 8:30 a.m. on Aug. 30 (2330 GMT, Aug. 29).

In addition, industrial output is projected to grow by 3.3% month-on-month in July, recovering from a 4.2% decline in June, driven by strong demand for semiconductor-related electronics and production machinery.

Retail sales growth for July is expected to slow, with a 2.9% year-on-year increase compared to 3.7% in June, as reported in the poll.

The Ministry of Economy, Trade and Industry will release both factory output and retail sales data at 8:50 a.m. on Aug. 30 (2350 GMT, Aug. 29).

Lastly, Japan’s jobless rate and jobs-to-applicants ratio are projected to remain stable at 2.5% and 1.23, respectively, according to the poll. Jobs data will also be available at 8:30 a.m. on Aug. 30 (2330 GMT, Aug. 29).