Shamia N Irving, April 25, 2008, 4:32pm
CPI- Consumer Price Index
Inflation in Japan soared to its highest level in 10 years, rising at a rate of 1.2% on the back of rising energy costs. Economists says that the elevated level to which its reached is only temporary. The rise was in line with the estimates but it was higher than the elevaed level in February, which was only 1.o%. The CPI, excluding fresh food, also rose 1.2% in March. The Ministry of Internal Affairs and Communications also reported that in Tokyo, inflation was slightly faster than what it was expected to be in April, prices were rising at a 0.6% increase when they were only expected to grow at a 0.5% rate. Japanese fixed income markets sold off sharply following the release, with yields on a 10-year government bonds rising to 1.5504% from 1.4947%, 5-year bonds rising 1.0594% to 11507%, and 2-year bonds rising 10 0.811% from 0.7098%. Session highs were reached around Midnight, with selling pressures leading to a brief halt in trading in Tokyo. The yen, the name of their currency, in Japan jumped 104.26 from 103.39 against the US dollar at 8am before pushing to the ultimate high of 104.83. Lindsay Coburn, an economist for ING, said higher energy costs account for the significant 4.2% annual rise in utility charges as well as the 3.5% year-over-year increase in transport and communications prices. Coburn noticed that while external cost-push pressures are behind the recent increase in consumer prices, local demand is exerting a mild negative pressure on prices, suggesting weak local demand will once again become the dominant influence on consumer prices in coming months. Coburn also believes that inflation is temporary but she's not sure how high inflation will get before it comes down. The Bank of Japan will announce its latest rate decision on Tuesday (EDT), and is expected to hold rates at 0.50%.
I just hope something can be done about the rising of prices, if they can't get it to completely cease, I hope they are able to stop it from rising at such a rapid pace.
http://www.economicnews.ca/login.php?page=reportsDetails&newsid=75310&prevview=&view=details&country=Asia&plimit=0&category=Asian%20Economic%20Reports
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