Consumer prices in Tokyo rose at their fastest pace in 22 years in April, surging 2.7% from a year earlier, according to preliminary data.
That is up from a 1% annual increase in consumer prices in Tokyo in March.
The data comes after Japan increased its sales tax to 8% from 5% from 1 April, pushing up prices.
The inflation rate in Japan’s capital city is seen as a leading indicator of the trend that is likely to follow across the country in coming months.
Japan has been trying to spur domestic demand through higher inflation.
Marcel Thieliant, Japan economist Capital Economics, said that consumer price growth across the country was likely to be even better than Tokyo in April.
“Of course national inflation will have surged in April due to the sales tax rise,” he said.
“Nationwide inflation probably accelerated by even more, as the national Consumer Price Index (CPI) has a lower weight on components which are not subject to the sales tax, notably housing rent and school fees.”
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