Japan's CPI soared most since 2008

The pace of growth in consumer prices in the world's third largest economy soared most since 2008 in July, as weak Yen drove up the cost of energy and Japanese policymakers makes progress in pulling the economy out of decades of deflation. The report from Statistics Bureau unveiled core consumer prices, which exclude fresh food, advanced 0.7% from a year earlier, exceeding analysts' expectations for a 0.6% gain and up from a 0.4% gain in the previous month, which was the first time in 14 months prices did not fall or stagnate. The main contributors to growth were light and water charges, which surged 6.4% annually, while the next biggest hike was recorded in transport and telecommunications, where prices jumped 2.6%. Meanwhile, prices in Tokyo grew by 0.4% after rising 0.3% in the prior month. Struggling more than 15 years from falling prices, the BoJ Governor Haruhiko Kuroda pledged in April to reach 2% inflation target within two years and double the money supply. This unprecedented stimulus programme eroded the value of the domestic currency, prompting consumers to increase spending, while banks should ease credit accessibility. Despite obvious improvement and success of government's measures, the Bank of Japan is still distant from a goal of generating 2% inflation. While the majority of economists are claiming the economy is strong enough to withstand the hike in sales tax, it is still threatening to damp the recovery.