Consumer prices in Japan’s capital Tokyo rose 4.3% in January, government data showed on Friday, exceeding the central bank’s 2% target for the eighth consecutive month.
Following the data’s release, the yen strengthened by 0.3% against the dollar, settling at 129.82.
The growth in Tokyo’s core consumer price index (CPI), which excludes fresh food but includes fuel, exceeded a median market forecast for a 4.2% gain and marked the fastest year-on-year increase since May 1981.
Analysts believe that the increase, which was mostly driven by food and gasoline prices but spread to a broader range of goods, will keep the Bank of Japan (BOJ) under pressure to phase out its massive stimulus program.
As businesses continued to pass on rising raw material prices to consumers, the Bank of Japan maintained monetary policy ultra-loose this month but boosted its inflation expectations in new quarterly projections.