UPDATE 1-Tokyo core consumer prices marks 1st annual rise in a year
* Tokyo core CPI up 0.1% yr/yr in July vs f’cast 0.0%
* Rise driven by higher gasoline, electricity bills
* Tokyo price rise suggests nationwide CPI will follow (Adds details, background)
TOKYO, Aug 3 (Reuters) – Core consumer prices in Tokyo marked their first annual increase in a year in July, data showed on Tuesday, heightening the chance nationwide inflation will perk up in coming months on rising energy costs and a rebound in domestic demand.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, rose 0.1% in July from a year earlier, compared with a median market forecast for flat growth, government data showed.
It was the first year-on-year increase since July last year, when the index rose 0.4%, the data showed.
The rise in the Tokyo index, which is considered a leading indicator of nationwide price trends, was driven largely by increases in gasoline and electricity bills reflecting higher crude oil costs.
But prices of household appliances and amusement park fees also rose, due partly to the base effect of last year’s slump caused by the coronavirus pandemic, the data showed.
Years of heavy money printing has failed to fire up inflation to the Bank of Japan’s 2% target as weak consumption keeps companies from translating higher costs to households.
Nationwide consumer inflation has barely risen even as other major economies, such as the United States, begin to fret about the risk of too-high inflation as their economies re-open from pandemic-induced lockdowns. (Reporting by Leika Kihara; additional reporting by Kentaro Sugiyama; editing by Richard Pullin)