A customer shops at a supermarket in Tokyo on Feb. 27, 2024.
Kazuhiro Nogi | Afp | Getty Images
Japan’s core inflation rate rose to a 16-month high at 3% in December, year on year, boosting the case for a rate hike from the Bank of Japan.
This was in line with inflation expectations from economists polled by Reuters, and higher than the 2.7% growth in prices recorded in November.
The December reading means that core inflation in the country has matched or ran above the Bank of Japan’s 2% target for 33 months in a row. The core inflation reading strips out only prices of fresh food, but includes energy.
The headline inflation rate in Japan came in at 3.6%, accelerating sharply from the 2.9% in November and hitting its highest level since January 2023.
The reading comes amid the Bank of Japan’s policy meeting, which is set to conclude today. A strong inflation reading offers the BOJ more room to raise rates.
The so called “core-core” inflation rate, which strips out prices of both fresh food and energy and is tracked by the BOJ, held steady at 2.4%.
Immediately after the data release, the yen marginally weakened to trade at 156.1 against the dollar.
