Japan's Core Inflation Reaches 2.7% in November, Highest in Seven Months, Amid Yen's Five-Month Low

Dec 19, 2024, 11:55 PM

Japan's core inflation rate accelerated to 2.7% in November from a year earlier, surpassing market expectations of a 2.6% increase and rising from October's 2.3%. This uptick, driven by rising food and fuel costs, keeps pressure on the Bank of Japan (BOJ) to consider raising interest rates. The core consumer price index, which excludes fresh food prices, reached its highest level since March 2024. The BOJ, which maintained its interest rates at 0.25% on the previous day, is now under increased scrutiny as inflation continues to exceed the central bank's 2% target, a threshold it has surpassed every month since April 2022. A separate inflation gauge, the 'core-core' CPI, which excludes both fresh food and energy prices and is closely monitored by the BOJ, rose to 2.4% from 2.3%, marking a seven-month high. The yen weakened against the dollar following the BOJ's decision, reaching a five-month low, which could further fuel inflation by increasing import costs.