Overall inflation increased to 1.6% from 1.5%.
CPI is heading towards the Bank of Japan's target of 2% but the Japanese government wants businesses there to increase wages in order to solidify the rise in inflation.
“Consumers will be hit in the pocket from rising prices and the upcoming sales-tax hike,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo. “The onus is now on companies to convert their profits into wage increases and capital spending.”BOJ Inflation Target is 2.0%
The core consumer price index has reached the BOJ’s median estimate of 1.3 percent for the fiscal year starting in April and is more than halfway to its 2 percent target adopted in January last year. When the BOJ unveiled stronger stimulus in April, the central bank said it aimed to hit the goal in about two years.
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