Japan inflation at 3.7% in November, highest since 1981
The Japanese Internal Affairs Ministry says core consumer prices in Japan climbed 3.7% last month compared to a year earlier.
Data on Friday showed that prices in Japan rose at their fastest pace since 1981 in November, fueled in part by higher energy costs.
Released by the Japanese Internal Affairs Ministry, the data showed that core consumer prices, which exclude volatile fresh food costs, climbed 3.7% last month compared to a year earlier.
Prices jumped the most for processed food items and were also higher for electricity and durable goods like air conditioners.
The November figure is well below the sky-high levels that have sparked concern in the United States, Britain, and elsewhere, but far exceeds the Bank of Japan's long-term goal of 2.0%.
Even excluding fresh food and energy, the index was up 2.8%.
"Although low by international standards, Japanese consumer price inflation at three percent to four percent is high enough to feel uncomfortable with stagnant wage growth," wrote Sarah Tan, an economist at Moody's Analytics, in a note.
Since the beginning of the year, the headline core consumer price index (CPI) has risen consistently, putting pressure on the Bank of Japan to modify its longstanding monetary easing policies.
The US Federal Reserve and other central banks have sharply hiked interest rates this year to tackle inflation.
Since the 1990s, Japan has swung between periods of sluggish inflation and deflation and continues to keep interest rates at ultra-low levels as it tries to kickstart its economy.
The Bank of Japan says it sees the recent price increases as temporary and that there is no reason to change course yet.
The starkly different approaches taken by the BoJ and the Fed have driven down the value of the yen against the dollar this year from about 115 yen per dollar in March to as low as 151 yen.
This week, the Japanese central bank delivered a shock tweak to its ultra-easy monetary policy, prompting the yen to strengthen rapidly.
While the adjustment falls short of a rate hike, analysts said it could help arrest the yen's declining value.
Most analysts expect price rises in Japan to peak around the end of the year or early 2023.
"Inflation will likely average four percent in December given delayed pass-through of higher producer prices," Tan pointed out, adding that "it is expected to decline in 2023 as policy support kicks in," with global inflation also moderating as commodity prices temper and supply chain disruptions are fixed.
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