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Japanese inflation flirts with five-year high
by Dylan Lobo on Oct 25, 2013 at 08:02
Japanese inflation remained close to a five-year high in September.
According to the Management and Coordination Agency, the core consumer price index rose by 0.7% in September, its fourth consecutive monthly rise.
The increase was boosted primarily by higher energy costs as the weaker yen inflated the cost of of imported oil and gas.
The latest reading is another endorsement for 'Abenomics', the aggressive monetary policy introduced by prime minister Shinzō Abe designed to end decades of deflation.
However, Capital Economics' analyst Marcel Thieliant expects inflation to decelerate as the yen stabilises.
Theilant said: 'While a gradual closing of the output gap and stubbornly high import price inflation point to a further rise in consumer price inflation, the pass through of the weak yen is now largely over. Further increases should be more muted.'
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