Japan: Core inflation tops market expectations again in November
Latest reading: Inflation rose to 2.9% in November, up from October’s 2.3%. November’s print was the second-highest in 13 months, and led annual average inflation to rise to 2.7% (October: 2.6%).
Core inflation also increased in November, to 2.6%, up from October’s 2.3%. The print exceeded market expectations again, and the uptick was largely due to the withdrawal of electricity and gas subsidies. Nonetheless, ‘core-core’ inflation—a measure which strips out both fresh food and energy costs—also ticked up, to 2.4% from 2.3%.
Finally, consumer prices increased 0.43% in November over the previous month, down from the 0.61% rise seen in October.
Outlook: Our panelists expect inflation to cool ahead, eventually settling just under the Bank of Japan’s 2.0% target in late 2025. In the short term, the government’s decision to reinstate energy subsidies from January to March will depress price pressures.