Japan's CPI Marks Biggest Increase in Nearly a Decade in December on Higher Energy Prices.
Japan's core consumer prices rose their most in nearly a decade in December and the economy minister warned the trend -- fueled by higher energy prices -- could hurt consumption. The core consumer price index rose 0.8 percent in December from a year earlier, according to data released Friday by the Ministry of Internal Affairs and Communications. That's its fastest rise since a 1.8 percent increase in March 1998.
"Rising oil and commodity prices are having an effect," Hiroko Ota, the economy minister, told reporters. "With wages not increasing, increases in prices of products related to people's everyday needs are a negative factor for consumer spending," she said.
Policy makers in resource-poor Japan, which buys most of its oil from the Middle East and imports much of its food, are increasingly concerned about expensive global commodities. Consumer sentiment has been deteriorating amid higher prices of gasoline and heating oil, and weak domestic demand meanwhile prevents small businesses from passing on high material costs to consumers. "Rises in crude oil prices have nothing positive for Japan," Ota said.
Friday's reading was above the 0.6 percent gain forecast by economists polled by Dow Jones Newswires and the Nikkei. The December result for the core index, which excludes volatile fresh food prices, marked the third straight month of increases, and followed a 0.4 percent gain in November.
As well, the core index covering the Tokyo metropolitan area for January, considered a leading indicator for nationwide consumer prices, rose a preliminary 0.4 percent on year, the data showed. The Tokyo CPI figure beat economists' forecasts of a 0.3 percent rise for the third straight month of gains.
Despite accelerating inflation in consumer-product prices, economists say the latest data is unlikely to make the Bank of Japan lean more toward raising interest rates in the near-term amid the current uncertainty over the global economy.
Japan's core consumer prices rose their most in nearly a decade in December and the economy minister warned the trend -- fueled by higher energy prices -- could hurt consumption. The core consumer price index rose 0.8 percent in December from a year earlier, according to data released Friday by the Ministry of Internal Affairs and Communications. That's its fastest rise since a 1.8 percent increase in March 1998.
"Rising oil and commodity prices are having an effect," Hiroko Ota, the economy minister, told reporters. "With wages not increasing, increases in prices of products related to people's everyday needs are a negative factor for consumer spending," she said.
Policy makers in resource-poor Japan, which buys most of its oil from the Middle East and imports much of its food, are increasingly concerned about expensive global commodities. Consumer sentiment has been deteriorating amid higher prices of gasoline and heating oil, and weak domestic demand meanwhile prevents small businesses from passing on high material costs to consumers. "Rises in crude oil prices have nothing positive for Japan," Ota said.
Friday's reading was above the 0.6 percent gain forecast by economists polled by Dow Jones Newswires and the Nikkei. The December result for the core index, which excludes volatile fresh food prices, marked the third straight month of increases, and followed a 0.4 percent gain in November.
As well, the core index covering the Tokyo metropolitan area for January, considered a leading indicator for nationwide consumer prices, rose a preliminary 0.4 percent on year, the data showed. The Tokyo CPI figure beat economists' forecasts of a 0.3 percent rise for the third straight month of gains.
Despite accelerating inflation in consumer-product prices, economists say the latest data is unlikely to make the Bank of Japan lean more toward raising interest rates in the near-term amid the current uncertainty over the global economy.
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