Japan April core CPI rises to 23-year high after sales tax hike

TOKYO Thu May 29, 2014 7:38pm EDT

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TOKYO May 30 (Reuters) - Japan's core consumer prices jumped 3.2 percent in April from a year earlier, government data showed on Friday, the fastest gain since February 1991 as an increase in Japan's national sales tax boosted prices across the board.

The increase in the core consumer price index, which excludes volatile fresh food prices but includes oil products, compared with economists' median estimate for a 3.1 percent rise, the Ministry of Internal Affairs and Communications said.

That followed a 1.3 percent increase in March, posting the 11th straight month of annual gains.

The Bank of Japan estimates that the sales tax hike - to 8 percent from 5 percent that took effect on April 1 - will add 1.7 percentage points to Japan's annual consumer inflation in April, and 2.0 points from the following month. The internal affairs ministry does not provide official estimates.

The so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the United States, rose 2.3 percent in April from a year earlier, the fastest annual gain since December 1997.

Core consumer prices in Tokyo, available a month before the nationwide data and seen as a leading indicator of nationwide inflation, rose 2.8 percent in May from a year earlier, posting the quickest rise since April 1992. (Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim)

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