Japanese consumer prices have risen the most in five years, giving a boost to Prime Minister Shinzo Abe.
Consumer prices excluding fresh food climbed 0.7 per cent in July when compared with the previous year, according to the Japanese Statistics Bureua, which published its new data today.
The report attributed this rise to rising prices in the fuel, light and water sub-sector, which rose 6.4 per cent from a year earlier.
This increase is a result of Japan’s shutting down its nuclear reactors, meaning the country now has to import more energy.
When fuel and food prices are removed, prices actually are shown to have fallen 0.1 per cent, slowing from a 0.2 per cent decline in June.
The rise in inflation is a boost to Abenomics, Prime Minister Abe’s aggressive monetary policy that combines massive amounts of quantitative easing and structural reforms.
As part of this, Abe has set an inflation target of 2 per cent in order to distance Japan from its deflationary past.
Capital Economics says: “Higher inflation can still largely be attributed to the weak exchange rate.
“Goods inflation has surged in response to the higher cost of imported goods, and may well rise a bit further in coming months. But service inflation, which is mostly domestically driven, did not rise further in July from the 0.1 per cent y/y recorded in June.”