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Tokyo’s core CPI got 2.7% lift in April from tax hike

JIJI

The core consumer price index for central Tokyo jumped 2.7 percent on year in April, the sharpest increase in 22 years, as the consumption tax hike to 8 percent from 5 percent raised prices on April 1, government data showed Friday.

For the capital’s densely populated 23 wards, the core CPI, excluding fresh food prices but not energy, stood at 101.7 against 100 for the base year of 2010, the Internal Affairs and Communications Ministry said.

The jump from 1 percent in March was the largest since April 1992, when the index climbed 2.9 percent.

“The acceleration of price growth reflected the tax hike, in line with the Bank of Japan’s projection, although the margin of increase varied item by item,” a ministry official said.

At a press conference, Finance Minister Taro Aso said, “The data showed that the new tax rate is penetrating very smoothly.”

The Tokyo CPI is watched closely as a leading indicator for nationwide price trends.

The number of items that grew more expensive surged to 414 from 220 the previous month, while those that fell dropped to 86 from 196.

Prices jumped 25.3 percent for rice cookers, 22.3 percent for pet food, 16.6 percent for paper towels and 13.9 percent for imported wine.

Expressway tolls soared 41.1 percent as discounts were scaled back for vehicles equipped with electronic toll collection machines.

In March, Japan’s core CPI rose 1.3 percent to 100.8, rising for the 10th straight month. But the pace of growth stayed flat for four months in a row.

In fiscal 2013, which ended March 31, the core CPI rose 0.8 percent from the previous year to 100.4, scoring the first increase in five years.

The narrower price index, which excludes food and energy prices, rose 0.2 percent, marking an increase for the first time in 15 years.