Tokyo Cpi Inflation Jumped In December

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Tokyo Cpi Inflation Jumped In December

Tokyo'S Cpi Inflation Jumped 2.1% During December

In a surprising turn of events, Japan's inflation decreased during December. This month's reading has sent the inflation lower towards the BOJ's target of 2%.

Japan's CPI reading increased by 2.1% annually during December. According to forecasts, a similar reading was expected, as November's reading was near 2.3%.

On an M/M basis, the core inflation in Japan jumped by 0.1% compared to November's reading.

Lower Fuel And Food Prices During December

look at the core inflation, which doesn't include fuel & and food prices, shows an increase of 3.5% for the month. A month earlier, the core inflation in Japan was 3.6%.

Core inflation is one of the indicators that the Bank of Japan closely monitors to gauge the inflation situation in the country. In 2023, the core inflation in Japan reached a forty-year high, which shows that the deflationary measures have finally started to show their impact.

On an annual basis, the headline CPI reading for December moved lower to 2.4% from the earlier reading of 2.6%.

The soft reading of inflation was mainly due to more affordable fuel &, and food prices in Japan. As the global supply chain has stabilized, the result is lower inflation in Japan & several other countries.

The Japanese Yen has also strengthened in the short term, which has allowed the country to lower import costs. Once again, that was an essential factor which sent the inflation lower.

December's reading is crucial because the BOJ will leave its dovish policy once the 2% inflation is reached. December's reading is only +0.1% away, which could be gone in January's reading at best.

This is strange because the rest of the world is considering ending the tightening cycle. However, Japan is still considering ending its dovish policy & and moving towards potential rate hikes.

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