(Bloomberg) -- Tokyo’s key inflation gauge held steady in July, topping expectations for a decline after nationwide price gains fell to the lowest in two years last month.
Consumer prices excluding fresh food rose 0.9% in July from a year earlier, compared with economists’ median estimate of 0.8%, the internal affairs ministry reported Friday. The reading for Tokyo is considered an early indicator for nationwide price moves.
Key Insights
- Lower mobile phone service charges and free preschool education are among factors expected to drag inflation lower in coming months. Nationwide inflation excluding fresh food hit the lowest level in two years in June.
- The Bank of Japan is set to meet next week as a global shift in monetary policy is raising expectations for additional action, but the BOJ’s options are limited after six years of radical stimulus.
- A sales tax hike planned for October poses a risk to consumer spending, though the government has lined up a series of measures to counter the impact.
- Overall, consumer prices in Tokyo rose 0.9% in July, compared with economists’ median estimate of 1.0%.
- Stripping out energy and fresh food, consumer prices climbed 0.8%, versus economists’ median estimate of 0.7%.