Price growth in Tokyo surged back above the Bank of Japan’s target in February, a jump that supports the case for the central bank’s first interest rate hike since 2007.
Consumer prices excluding fresh food rose 2.5% in the capital, re-accelerating after cooling in January to a revised 1.8%, the internal affairs ministry said Tuesday. The reading matched economists’ estimates. The pickup largely reflected the fading impact of government subsidies rolled out last year to keep a lid on utility costs.
Tokyo’s figures are leading indicators of the national data to be announced later this month. Yields on 10 year government debt rose to 0.725% following the report. Currency markets were largely unmoved by the widely expected jump.