By Kantaro Komiya
TOKYO (Reuters) – Consumer inflation in Tokyo for October likely undershot the central bank’s price target for the first time in five months, a Reuters poll showed on Friday.
The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was expected to have risen 1.7% from a year earlier, the median forecast of 18 economists showed.
That would follow a 2.0% rise in September and mark the first time the data misses the Bank of Japan’s (BOJ) 2% target since May’s 1.9% growth.
“The momentum of food price hikes is weakening, and the recovery pace of consumer spending remains sluggish despite considerable wage growth”, said Takeshi Minami, chief economist at Norinchukin Research Institute.
Japan’s nationwide core CPI, which excludes fresh food but includes energy items, slowed to a 2.4% rise in September, data showed earlier on Friday.
The government will release October Tokyo CPI data on Oct. 25 at 8:30 a.m. Japan time (Oct. 24 at 2330 GMT), which will be the latest price data for the BOJ when it drafts quarterly economic forecasts at its Oct. 30-31 policy meeting.
The BOJ is widely expected to keep interest rates unchanged at its October meeting, according to a Reuters poll. A slim majority of economists expected the BOJ to stick to the current 0.25% rate through end-December, and nearly 90% of economists anticipate a hike to 0.5% by end-March.