MNI BRIEF: Japan Nov Tokyo Core CPI Rises 2.8% Vs. Oct 2.8%

The year-on-year rise in Tokyo core inflation in November was unchanged from October at 2.8% and remained above 2% for the 13th consecutive month, data from Japan’s Ministry of Internal Affairs and Communications showed on Friday.

The November index was lifted by higher energy prices, which rose 2.6% y/y from 2.2% in October, but was partly offset by a slowdown in prices of foods excluding perishables to 6.5% from 6.7%.

Core-core CPI, which excludes both fresh food and energy and is a key gauge of underlying inflation, rose 2.8% y/y in November, also unchanged from October, and stayed above 2% for the ninth straight month.

Processed food prices in Tokyo, which Bank of Japan officials closely watch as a gauge sensitive to economic activity, rose 5.7% in November, easing from October’s 5.9%, while services prices increased 1.5% compared with 1.6% previously.

The BOJ expects underlying CPI inflation to remain temporarily sluggish amid a worsening economic backdrop before gradually moving toward its 2% target. (See MNI POLICY: BOJ Prefers To Wait In Dec, Barring Yen Weakness)