Japan’s core consumer prices rise at fastest rate in nearly 2 years

FILE PHOTO: Shoppers wearing protective masks following the coronavirus outbreak, are seen at a supermarket in Tokyo, Japan
FILE PHOTO: Shoppers wearing protective 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 rate of increase in nearly two years. year, an indication that the impact of global commodity price inflation is increasing.

However, this increase is not likely to prompt the Bank of Japan (BOJ) to withdraw monetary stimulus measures anytime soon, with inflation still far away from the central bank’s 2% target. analysts said.

The increase in the nationwide core consumer price index (CPI), which excludes volatile fresh foods but includes the cost of oil, was larger than the average market forecast of a 0.4 increase. %.

It marked the biggest gain since February 2020 and followed a 0.1% gain in October.

The so-called ‘core’ inflation, which excludes both food and energy prices and is comparable to the core price index used in the US, fell 0.6 per cent in November compared with a year earlier.

Japan has not been immune to global commodity inflation, with wholesale prices rising to a record 9.0% in November from a year earlier.

But core consumer inflation has hovered around zero, as companies remain cautious about passing costs on to consumers on concerns that households could hold back spending.

The BOJ kept interest rates extremely loose last week, and Governor Haruhiko Kuroda stressed his willingness to keep interest rates low, even as other major central banks look to exit the measures. stimulate the crisis mode.

Japan has lagged behind other nations in making a strong recovery from last year’s pandemic’s hit to the economy, with its gross domestic product falling 3.6% year on year. year 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) Japan’s core consumer prices rise at fastest rate in nearly 2 years

Bobby Allyn

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