Japan’s core inflation rises to a 16-month high, strengthening the case for a rate hike
Shoppers at a supermarket in Tokyo on February 27, 2024.
Kazuhiro Nogi | AFP | Getty Images
Japan’s core inflation rate rose to a 16-month high by 3% in December, year-on-year, increasing the case for a rate hike from the Bank of Japan.
That was in line with the inflation expectations of economists polled by Reuters and higher than the 2.7% rise in prices recorded in November.
December’s reading means the country’s core inflation has matched or topped the Bank of Japan’s 2% target for 33 months in a row. The core inflation reading removes only fresh food prices, but includes energy.
Japan’s headline inflation rate was 3.6%, accelerating sharply from 2.9% in November and hitting its highest level since January 2023.
The reading comes amid the Bank of Japan’s policy meeting, which is due to conclude today. A strong reading of inflation offers the BOJ more room to raise rates.
The so-called “core” inflation rate, which separates fresh food and energy prices and is tracked by the BOJ, is holding steady at 2.4%.
Immediately after the data release, the yen weakened marginally to trade at 156.1 against the dollar.
