Japan’s inflation at record peak
TOKYO: Japan’s core consumer prices in December rose 4.0 per cent from a year earlier, double the central bank’s 2 per cent target and hiting a fresh 41-year high, data showed on Friday, adding to recent growing signs of mounting inflationary pressure.
The data will likely keep alive market expectations that the Bank of Japan (BOJ) will soon end its yield control policy and allow interest rates to rise more, analysts say.
The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, matched a median market forecast and followed a 3.7 per cent annual gain seen in November.
The annual rise in core CPI thus exceeded the BOJ’S 2 per cent target for a ninth straight month.
Core-core CPI, which strips away both fresh food and energy costs, was 3.0 per cent higher in December than a year earlier, accelerating from a 2.8 per cent gain seen in November.
The BOJ kept monetary policy ultra-loose on Wednesday but raised its inflation forecasts in fresh quarterly projections, as companies continued to pass on higher raw material costs to households.
Many market players expect the central bank to phase out yield curve control, a policy under which it caps long-term interest rates around zero, when dovish governor Haruhiko Kuroda’s second, five-year term ends in April.
A leading indicator of Japanese consumer prices likely rose in January at more than twice the speed of the central bank’s target, hiting another four-decade-high, a Reuters poll showed.
Inflation data in the world’s third-largest economy has received unusual atention amid market expectations of a shit in the Bank of Japan’s (BOJ) ultra-easy monetary policy.
The core consumer price index (CPI) in Tokyo was seen rising 4.2 per cent in January from a year earlier, according to the median estimate of 19 economists.