Japan Overall Inflation +2.3% On Year In July
8/28/2008 11:50 PM ET
(RTTNews) -
Overall inflation in Japan increased by 2.3 percent on year in July, the Ministry of Internal Affairs and Communications said on Friday, marking the biggest jump in the consumer price index since October 1997, when it rose 2.5 percent on year.
That was slightly higher than analyst expectations that called for a 2.2 percent annual jump, and it was higher than the 2.0 percent gain in June. It also marked the 10th consecutive monthly increase, largely fueled by a 28.7 percent jump in gasoline prices.
Core CPI, which excludes the volatile changes in fresh food prices, jumped 2.4 percent on year - also the highest increase since a 2.4 percent gain in October 1997. The figure increased for the 10th straight month, and followed a rise of 1.9 percent in June. Most economists were forecasting a core CPI rise of 2.3 percent.
Overall CPI for the Tokyo area rose 1.3 percent in August, marking the biggest increase since March 1998. The forecast and the previous reading both sat at 1.6 percent. Core inflation in the Tokyo metropolitan area rose a preliminary 1.5 percent on year in August.
Among other economic news released on Friday in Japan:
• Manufacturing activity in Japan has retreated for a sixth consecutive month in August, the Nomura/JMMA Japan Purchasing Managers Index said, checking in at a seasonally adjusted 49.6. That's down slightly from the reading of 47 in July, and while it held above the six-year low of 46.5 in June - it still was below the boom-or-bust score of 50 that indicates contraction. The reading coincides with contraction in GDP as the Japanese economy shrank 0.6 percent in the second quarter. Additional decline in the third quarter would put the world's second largest economy officially in recession.
• Industrial production climbed a seasonally adjusted 0.9 percent in July compared to the previous month, the Ministry of Economy, Trade and Industry said, with the index moving up to 107.9 from 106.9 in June. That beat analyst expectations that called for a 0.3 percent monthly decline and it was well above June's 2.2 percent fall. On an annual basis, industrial production jumped 2.0 percent, topping the forecast for a 0.6 percent gain and well above the flat reading in the previous month. Despite the data, the Ministry of Economy, Trade and Industry maintained its view which was downgraded last month, saying that the trend in industrial output is softening. Citing a poll among private sector companies, the ministry added that industrial output is expected to fall 2.9 percent on month in August but then to jump 3.4 percent in September from August.
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