Tokyo Core CPI To Attain New 40-Year-High Up 3.8% In December

Reuters

Consumer prices in Japan’s capital likely rose in December at the fastest pace in nearly 41 years, a Reuters poll of economists showed on Friday, as the market looks to inflation data for clues on a possible shift in monetary policy.

The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide inflation trends, was expected to have climbed 3.8 per cent in December from a year earlier on widening retail price rises, according to the median estimate of 16 economists.

That would follow a 3.6 per cent increase in November and hit a fresh high since April 1982’s 4.2 per cent rise, when inflation was still hot in the aftermath of the 1970s’ oil crises.

“Although global commodity prices have come down to the pre-Ukraine war levels and weakness in the yen has abated, price hikes in goods and services will likely continue since many Japanese firms haven’t been able to reflect higher input costs on their selling prices,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Japan’s CPI figures have drawn unusual attention as traders look for any hints ahead of the Bank of Japan’s Jan. 17-18 rate review that it may start to exit from its ultra-loose policy. The central bank jolted the market last month with a surprise tweak to its long-term yield cap, allowing rates to rise more.

Economists in the poll also expected the first month-on-month contraction in household spending in three months in November, a worrying sign for a consumption-led recovery of the world’s third-largest economy.

Household spending likely dropped 0.5 per cent in November from the previous month, while it was forecast to have risen 0.5 per cent from the same month a year earlier, according to the poll.

The poll also showed, Japan’s current account balance likely returned to a surplus of 471.1 billion yen ($3.52 billion) in November, after October’s 64.1 billion yen deficit, the first shortfall since January.

The government will release the Tokyo CPI data and household spending data on Jan. 10 at 8:30 a.m. (Jan. 9, 2330 GMT). The current account data is due on Jan. 12 at 8:50 a.m. (Jan. 11, 2350 GMT).

Previous articleKenanga Research Expects Consumer Spending Sentiment To Stay Positive In 2023
Next article63% of Malaysian Sellers Positive about E-Commerce

LEAVE A REPLY

Please enter your comment!
Please enter your name here