Tokyo inflation holds steady, little cheer for Japan’s central bank

By Leika Kihara

TOKYO (Reuters) – Tokyo’s core consumer price inflation was unchanged in October from the previous month, government data showed on Friday, offering little encouragement for Japan’s central bank as it struggles to reach its ambitious 2 percent inflation target.

The data comes ahead of the Bank of Japan’s rate review next week, when it is set to monetary policy steady and maintain its optimistic view on the economy even as global trade frictions and volatile markets cloud the growth outlook.

The core consumer price index (CPI) for Tokyo, a leading indicator of nationwide price trends, rose 1.0 percent in October from a year earlier, matching a median market forecast.

The pace of gain in the core CPI, which includes oil products but excludes fresh food prices, was unchanged from September.

The so-called core-core CPI, which strips away the effect of both energy and fresh food prices, rose 0.6 percent in October after increasing 0.7 percent in September.

Inflation has remained well below the BOJ’s 2 percent target despite Japan’s steady economic recovery, forcing the BOJ to maintain a massive stimulus despite the rising costs such as the hit to bank profits from years of near-zero interest rates.

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