The Bank of Japan published the report containing these figures on Friday, saying its inflation gauge that excludes fresh food and special factors rose 2.6% in August versus 2.3% in July. The BOJ added that "special factors" cover government subsidies for gasoline and utilities, which are excluded from that series.
A separate pared-down measure that strips out non-fresh food, energy and special factors increased to 1.8% year-on-year, up from 1.6% previously. Government statistics still show headline inflation below the BOJ's 2% target mainly because of government actions to lower living costs.
The report comes after the BOJ raised its policy rate last week at a quicker pace and warned of the risk that inflation could run above its 2% objective. That appraisal grew more important after two board members opposed last week's rate increase.
The two dissenters, Toichiro Asada and Ayano Sato, were appointed earlier this year by Prime Minister Sanae Takaichi and cited inflation when explaining their dissenting votes. Their opposition reduced the perceived hawkishness of the policy board and helped push the yen lower.
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Prices implied by overnight index swaps suggest investors put the probability of another BOJ rate increase by December at more than a 90%. A Bloomberg survey of economists taken before the BOJ's September meeting found January was the most commonly expected timing for the next hike, chosen by 58% of respondents, while about 35% expected December. The BOJ is scheduled to make its next policy announcement on Oct. 30. The article included a graphic attributing data to BOJ and Bloomberg and carried an onscreen heading reading BOJ's Gauge Shows Price Trend Is Well Above 2% Target.
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