(TOKYO) – On Friday, the statistics indicated a 2.7% increase in the consumer prices in Tokyo this month, as compared to the last year’s same period. This is the fastest increase in prices since 1992. The data showed that increase in Japan’s sales tax forced prices up across the city. The sales tax has been increased to 8%, which was 5% earlier, and is in effect since 1st of April 2014.
This increase in the prices as measured by Consumer Price Index (CPI) was marginally less than the economists’ average forecast of a 2.8% increase and also followed a 1.0 percent gain last month. It is to be noted that the CPI includes oil products but does not include the fresh food prices. The prices in Tokyo are regarded as a main indicator of nationwide inflation.
The information regarding the consumer prices of Tokyo area is usually released one month prior to the release of nationwide data. The Bank of Japan speculates that the increase in sales tax will add another 1.7% points to Japan’s inflation in April.
The data from the Ministry of Internal Affairs showed that nationwide consumer prices increased by 1.3% in March compared to last year’s same period. This was a bit less than the average market forecast of a 1.4% gain followed by a 1.3% increase in February and was the most recent increase since October 2008. Moreover, it was an indication that the economy was emerging slowly from 15 years of mild deflation.