Japan’s core consumer inflation rate likely rose to a near eight-year high in August as companies passed on rising raw material costs fuelled by the weak yen, highlighting persistent price pressures in the economy, a Reuters poll showed.

Economists estimate the nationwide core consumer price index (CPI), which excludes volatile fresh food prices but includes energy, rose 2.7% last month from a year earlier.

That would mark the fastest rise since November 2014 and follow a 2.4% annual gain seen in July.

“It seems that the inflation rate was pushed up from July,” said Takeshi Minami, chief economist at Norinchukin Research Institute, adding that costs of things such as utility bills, processed food, overnight stays and eating out likely rose.

“Since moves to pass on rising import costs of raw materials continues, the nationwide CPI for August is likely to show a similar result,” he added.

The expected core CPI rise would be the fastest in 31 years when stripping out the effect of past sales taxes hikes, Minami said. ...continue reading