Japan Kerninflation

Japan's core consumer price index, which excludes fresh food but includes fuel costs, rose by 2.7% year-on-year in November 2024, surpassing market expectations of a 2.6% increase. This marks the highest core inflation rate in three months, following gains of 2.4% and 2.3% in September and October, respectively. Core inflation in Japan has consistently stayed at or above the Bank of Japan's 2% target for about two and a half years, influencing the central bank’s increasingly hawkish stance this year. In response to ongoing inflationary pressures, the Bank of Japan raised interest rates in both March and July and has signaled potential further hikes. However, at its December meeting, the central bank decided to keep rates unchanged, citing the need to monitor wage trends, the uncertainties surrounding global economic conditions, and the policies of the incoming US administration.