FILE PHOTO: Shoppers wearing protective face masks, following an outbreak of the coronavirus disease (COVID-19), are seen at a supermarket in Tokyo, Japan March 27, 2020. REUTERS/Issei Kato/File Photo GLOBAL BUSINESS WEEK AHEAD
December 24, 2021
By Takahiko Wada and Leika Kihara
TOKYO (Reuters) – Japan’s core consumer prices rose 0.5% in November from a year earlier, government data showed on Friday, marking the fastest pace of increase in nearly two years in a sign that the fallout from global commodity price inflation is broadening.
The increase, however, is unlikely to prompt the Bank of Japan (BOJ) to withdraw monetary stimulus any time soon, with inflation still distant from the central bank’s 2% target, analysts say.
The rise in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, was bigger than a median market forecast for a 0.4% gain.
It marked the biggest increase since February 2020 and followed a 0.1% rise in October.
The so-called ‘core-core’ inflation index, which excludes both food and energy prices and is comparable to the core price index used in the United States, fell 0.6% in November from a year earlier.
Japan has not been immune to global commodity inflation, with wholesale prices rising a record 9.0% in November from a year earlier.
But core consumer inflation has hovered around zero, as firms remain cautious about passing on costs to consumers on concerns that households may hold back on spending.
The BOJ maintained an ultra-loose interest rate policy last week, and governor Haruhiko Kuroda stressed his readiness to keep rates low, even as other major central banks head for an exit from crisis-mode stimulus measures.
Japan has lagged other countries in staging a strong rebound from last year’s pandemic hit to the economy, with its gross domestic product shrinking an annualised 3.6% in July-September due to weak consumer spending and output hit by a spike in coronavirus infections and supply constraints.
(Reporting by Leika Kihara; Editing by Muralikumar Anantharaman)
Source: One America News Network
