TOKYO, July 21 (Reuters) – Japan’s core inflation stayed above the central bank’s 2% target in June for the 15th straight month but an index stripping away the effect of energy costs slowed, data showed, suggesting the prolonged commodity-driven price pressures may have peaked.
Yet, with services price growth also slowing last month, policymakers will feel that wage pressures have yet to build up enough to warrant an imminent tweak to the ultra-loose monetary stance.
While the data heightens the chance the Bank of Japan (BOJ) will upgrade this year’s inflation forecast next week, it may take pressure off the central bank to soon begin phasing out its massive monetary stimulus, analysts say.
“Cost-push inflation is finally beginning to peak out. We’ll likely see inflation slow in coming months, which would allow the BOJ to keep policy steady for the time being,” said Toru Suehiro, chief economist at Daiwa Securities.
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Source: www.reuters.com
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