TOKYO INFLATION REACHES FASTEST RATE SINCE 1982

TOKYO INFLATION REACHES FASTEST RATE SINCE 1982

Tokyo inflation fastest rate. Japan inflation beat forecasts fastest since 1982, accelerating suggesting national price growth will also pick up in November after months-to-month (mtm) of weaker yen and energy costs which increase. Japan’s Interior Ministry noted consumer prices excluding fresh food rose 3.6 percent in the capital in November, at a faster pace driven by further increases in processed food prices. The data from the Ministry of Home Affairs was the highest inflation since April 1982 and was stronger than the 3.5 percent forecast by analysts. The continued acceleration in core inflation challenges the views of Bank of Japan (BOJ) Governor Haruhiko Kuroda. He believes that current cost-driven inflation is only temporary and further stimulus is needed to ensure price growth is sustainable. The rise in energy costs is likely to lessen as increased government subsidies go into effect in the coming months, even though most economists agree with Kuroda that Japan’s inflation will increase, although views differ so far. The BOJ is likely to keep interest rates the lowest for the rest of Kuroda’s term. Market speculation has been largely focused on what will happen after the governor leaves in April.
“Given what the BOJ said and current inflation forecasts, I don’t think monetary policy will change in fiscal year 2022,” said SMBC Nikko Securities chief economist Yoshimasa Maruyama. According to Yoshimasa, if the new governor is pressured by the government over the weaker yen, the BOJ could still continue policy in fiscal 2023. Tokyo figures showed processed food prices rose 6.7 percent in November, contributing around 1.4 percentage points to overall inflation and beyond energy impact. Not only that, most of the food including imported raw materials were also affected by the weakness of the yen. Tokyo inflation fastest rate. According to the Teikoku Databank survey, there were 833 food items including dairy products that experienced price increases in November. The report also predicts Japan will be hit by another wave of price hikes in February or March next year, with the cost of another 2,000 items expected to rise. Japanese Prime Minister Fumio Kishida, seeking to cushion the consumption hit from rising prices, put together an economic stimulus package last month, even partly funded by a 29.1 trillion yen (US$210 billion) extra budget.

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