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TOKYO :Core consumer inflation in Japan’s capital Tokyo, considered a leading indicator of nationwide trends, hit 2.3 per cent in November, slowing from the previous month in a sign of easing cost-push pressure in the world’s third-largest economy.
The data will be among factors scrutinised by the Bank of Japan (BOJ) when it meets for a two-day policy meeting concluding on Dec. 19.
The year-on-year rise in the Tokyo core consumer price index (CPI), which excludes volatile fresh food but includes fuel costs, compared with a median market forecast for a 2.4 per cent gain and slowed sharply from a 2.7 per cent increase in October.
The rate of inflation matched a low marked in July last year as government subsidies pushed down fuel costs and price hikes for food moderated, the data showed.
The so-called “core core” index that strips away both fresh food and fuel prices – closely watched by the BOJ as a gauge of broader price trends – rose 3.6 per cent in November from a year earlier after a 3.8 per cent gain in October, government data showed on Tuesday.
Service prices rose 3.0 per cent in November from a year earlier, marking the fastest pace since 1994, suggesting that prospects of higher wages are prompting firms to pass on increasing labour costs.
The data underscores the BOJ’s view that rising wages and service costs will replace cost-push inflation, and help Japan see inflation sustainably meet the bank’s 2 per cent target.
The BOJ remains a dovish outlier among global peers, having maintained ultra-loose policy even as major central banks elsewhere raised interest rates aggressively to fight rampant inflation.
With inflation having exceeded the BOJ’s 2 per cent inflation target for more than a year, many market players expect the bank to phase out its massive stimulus some time next year with some betting on a shift as early as in January.
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