TOKYO, September 26, 2008 (AFP) – Japan’s inflation rate stayed at a decade high of 2.4 percent in August as soaring energy costs continued to pressure Asia’s largest economy, official figures showed Friday.
Core prices rose for an 11th straight month, and at the same pace as in July, when inflation was the fastest since October 1997. The figure matched market expectations.
Japan was trapped in a deflationary spiral for years, but the return of inflation has also caused concern as it is being driven by rising import costs rather than a stronger domestic economy.
Core inflation in Tokyo, a leading indicator released a month earlier than the figures for the whole of Japan, picked up to 1.7 percent in September from 1.5 percent in August, the government reported.
Core inflation excludes volatile fresh seafood, fruit and vegetable prices.
There are concerns that rising prices will dampen already tepid consumer spending, adding to the troubles of Japan’s economy, which contracted last quarter, heightening fears of a recession.
Despite the resurgent inflation, Japan’s central bank is not expected to raise its super-low interest rates any time soon to try to contain price pressures, du