Japan's core inflation hits a 19-month high, reinforcing expectations for central bank interest rate hikes

ChainCatcher news, according to Jinshi Data reports, data released earlier today showed that Japan's core consumer inflation accelerated in January, reaching 3.2% year-on-year, the fastest growth in 19 months.

The stronger-than-expected growth reinforced expectations that the Bank of Japan may continue to raise interest rates as inflationary pressures persist. The rise in prices seems to align with the central bank's forecasts. Analysts pointed out that inflation in the service sector did not accelerate, rising 1.4% year-on-year in January, compared to 1.6% in December; however, overall, goods inflation did not slow down.

For the past three years, Japan's inflation rate has remained above the central bank's 2% target. This has prompted a shift in monetary policy. Bank of Japan Governor Kazuo Ueda previously hinted that if wage growth continues to support consumption, allowing companies to raise wages and maintain price increases, the central bank may further raise interest rates.