Tokyo consumer prices, a leading indicator of nationwide trends, rose in November at their fastest annual pace in 40 years and exceeded the central bank’s 2 percent target for a sixth straight month, signaling inflationary pressures still bigger.
The rise, driven mainly by food and fuel but spreading to a wider range of goods, cast doubt on the Bank of Japan’s (BOJ) view that recent cost-driven inflation would prove transitory, some analysts said.
Tokyo’s core consumer price index (CPI), which excludes fresh food but includes fuel, was 3.6 percent higher in November than a year earlier, government data showed on Friday.
The last time Tokyo inflation was faster
The increase beat an average market estimate of 3.5 percent and the 3.4 percent increase recorded in October.
The last time Tokyo inflation was faster was in April 1982, when the core CPI was 4.2% higher than a year earlier.
The wave of monetary tightening around the world
While the increase was driven mainly by electricity bills and food prices, companies also demanded more for durable goods as the weak yen pushed up the cost of imports, the data showed.
The BOJ has kept interest rates ultra-low on the view that inflation will slow below its target again next year when the boost from rising fuel prices dissipates. The central bank therefore remained an exception to the wave of monetary tightening around the world aimed at combating rising inflation.