Japan's consumer prices spike to highest level in 40 yrs

Japan's consumer prices increased 3.6 per cent in October from a year earlier, marking a 40-year high, owing to a weak yen further inflating soaring energy costs, the government said in a report on Friday.

The nationwide core consumer price index, which excludes volatile fresh food items, rose for the 14th straight month, the data showed, beating a 3.5 per cent increase forecast by economists here, reports Xinhua news agency.

The latest data showing inflation in Japan hit its highest level since February 1982, came on the heels of September's 3.0 per cent increase and again topped the Bank of Japan's (BOJ) 2 per cent target.

The CPI has remained above the BOJ's 2 per cent target for seven straight months, but the Japanese central bank believes that the current global inflation crisis is temporary.

The bank's commitment to its ultra-easy monetary policy is in contrast to other major central banks who have aggressively hiked their interest rates to tame soaring inflation.

The widening interest rate gap between the BOJ and its global peers, particularly the US Federal Reserve, has resulted in the Japanese currency dropping to a series of 32-year lows versus the dollar.

The yen's persistent weakness of late has driven up import costs for energy products including liquified natural gas and coal, as well as food products, the downside effects of which are being felt by households in resource-poor Japan.