August 2023 Consumer Price Index

◆Japan’s August 2023 core CPI (excluding fresh food) recorded +3.1% y/y. New core-core CPI (excluding fresh food and energy) was at +4.3%. The seasonally adjusted figure for new core-core CPI (seasonally adjusted by Laspeyres' Chain Index Method) was at +0.4% m/m (+4.7% on an annualized basis) and continues to increase rapidly. The growth trend in prices remains strong.

◆Looking at the y/y change in core CPI in terms of goods and services, the positive range of durable consumer goods shrank, while the positive range widened for semi-durable goods and non-durable goods (excluding fresh food and energy). Meanwhile, the negative range in energy prices widened, while services marked time in comparison to the previous month.

◆As for the future of Japan’s core CPI (excluding fresh food), the growth trend is expected to continue. With the high rate of growth in wages achieved in the 2023 spring labor negotiations, the service prices, which are closely linked to the wage growth rate, are showing an upward trend as the underlying tone. Companies are now becoming more aggressive in their pricing behavior, and there is a possibility that they will further accelerate their efforts to pass on the increased input costs resulting from higher wages to selling prices.