Tokyo consumer prices rose 3.6% in Nov., the biggest gain in four decades | So Good News
Tokyo’s consumer prices gained 3.6 percent in November from a year earlier, marking the biggest rise since 1982 amid rising energy and food costs weighing on household incomes, the government showed on Friday.
A sharp drop in the yen has pushed up impoverished Japan’s import prices, with core consumer prices excluding fresh food set to hit a 15-month low, according to the Interior and Communications Ministry.
A file taken in November 2022 shows flour sold at the Akidai market in Tokyo’s Nerima district. (Kyodo)
Inflation in Tokyo is seen as an indicator of what to expect for the rest of the country and the latest figures show that inflation is continuing. It topped the Bank of Japan’s 2 percent target for the sixth consecutive month.
The rate of profit rose from 3.4 percent in October, with the November core CPI reading the highest since the 4.2 percent recorded in April 1982. .
Rising commodity prices have prompted the government to introduce measures to support struggling families and businesses. Global CPI already reached 3.6 percent in October and economists expect further gains by the end of the year.
The economic slowdown has led the BOJ to maintain its policy of ultra-low interest rates, causing the yen to weaken sharply as its global peers have been raising interest rates to curb inflation.
Governor Haruhiko Kuroda has said that the gains seen in recent months may not continue into next year because most of them are due to higher prices of goods and imports.
However, the high prices of everyday goods are already dampening consumer sentiment even though private consumption, which is a major part of the economy, has been supported by steady demand after the lifting of measures to combat the coronavirus.
Energy prices rose 24.4 percent, marking another month of double-digit growth as electricity and natural gas prices rose sharply. Food prices, excluding perishables, rose 6.7 percent
Following the big gains, caused by concerns over Russia’s war in Ukraine, crude oil prices have shown signs of stabilization. But they have a big problem with services and the government is planning to reduce the household expenses for electricity and gas from next year.
Aided by government aid to oil exporters to lower fuel prices, oil prices fell by 0.8 percent, marking the first drop since February last year. The inflation of kerosene prices was reduced to 6.7 percent from 11.4 percent in October, the data showed.
However, gas prices in the city rose 33.0 percent and electricity prices gained 26.0 percent.
All of the gains in the headline CPI came despite a decline in housing costs, which fell by 16.6% amid a government relief program to revive local tourism that was hit by COVID-19. The government plans to maintain this policy next year.
The government and the BOJ are stressing the need for wage growth, which is critical to Prime Minister Fumio Kishida’s efforts to redistribute wealth and for the central bank to meet its 2 percent inflation target in a steady and sustainable manner.
The continued rise in inflation did not lead the BOJ to change its monetary policy because it is based on the idea that inflation is not supported by wage growth and strong domestic demand but by external factors such as commodity prices.
The so-called core CPI, which strips out energy and fresh food, rose 2.5 percent, for the eighth straight month.
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