© Reuters. FILE PHOTO: Shoppers wearing protective face masks following a coronavirus disease (COVID-19) outbreak are seen at a supermarket in Tokyo, Japan on March 27, 2020. REUTERS / Issei Kato / File Photo
By Leika Kihara
TOKYO (Reuters) – Japan's core consumer prices rose 0.2% yoy in June, marking the fastest annual growth in over a year, data showed Tuesday, a sign that the impact of global commodity inflation is gradually increasing.
However, the increase, largely driven by higher energy costs, was much smaller than other major economies due to weak consumption, adding to expectations that the Bank of Japan will be forced to maintain its massive stimulus for the time being.
The rise in the Core Consumer Price Index (CPI), which includes oil products but excludes volatile fresh food prices, was an average market forecast of 0.2% and followed a 0.1% increase in May. It was the fastest annual growth since rising 0.4% in March 2020.
In some countries, including the United States and the UK, inflation has risen faster than expected as demand rebounds from the coronavirus pandemic, sparking debate about how quickly to wean their economies off the stimulus.
While global commodity inflation has pushed wholesale prices higher in Japan, consumer prices have barely risen as companies remain cautious about passing higher costs on to households.
A resurgence in COVID-19 infections forced the government to stop Monday through Nov.
In new quarterly forecasts released on Friday, the BOJ lowered its economic growth forecast for the fiscal year ending March 2022 from 4.0% to 3.8%, in part due to the new restrictions.
It revised this year's core CPI forecast from 0.1% to 0.6%, largely reflecting the upswing from higher energy prices.
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