Yields on 30-year government bonds hit record highs after consumer prices rose. Central bank boss Kazuo Ueda, though, is still focused on underlying inflation. That’s supposed to prevent premature rate hikes. But he now needs to rein in rising costs before they get out of hand.
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Japan’s 30-year government bond yields rose to a record high of 3.21% on August 22 after official data showed consumer inflation excluding fresh food increased 3.1% year-on-year in July, well above the Bank of Japan’s target of 2%.
Reuters reported on August 13 that pressure is growing within the central bank to move away from Governor Kazuo Ueda’s preferred price measure of “underlying inflation”, a concept that is not reflected in any single metric but in practice places greater emphasis on domestic demand and wages.