MNI BRIEF: Japan Nov Core CPI Rises 3.0% Vs. Oct 3.0%

Japan’s annual core consumer inflation rate rose 3.0% y/y in November, unchanged from October, reflecting a combination of lower energy prices and higher food prices excluding perishables, data released by the Ministry of Internal Affairs and Communications showed on Friday.

The November reading remained above the Bank of Japan’s 2% target for a 44th consecutive month and held at the 3% level for the second straight month.

Energy prices increased 2.5% y/y in November, accelerating from October’s 2.1% rise, boosting the overall index. By contrast, food prices excluding perishables rose 7.0%, easing slightly from 7.2% in October and weighing on inflation.

The underlying inflation rate, measured by the core-core CPI that excludes both fresh food and energy, rose 3.0% y/y in November, slowing from 3.1% in October.

Services prices, which BOJ officials closely monitor to assess the strength of the virtuous cycle between wages and prices, increased 1.6% y/y in November, unchanged from October. Services inflation remained below 2%, reinforcing officials’ view that price gains in the sector have yet to accelerate sufficiently to sustainably achieve the BOJ’s price stability target.

Prices for processed foods, which account for about 15% of the total CPI and are considered sensitive to economic activity, rose 6.1% y/y in November, decelerating from a 6.4% increase in October.

The BOJ board will deliver its latest policy rate decision later today. (See MNI BOJ WATCH: Board To Consider Hike, Maintain Half-year Pace)