Core inflation in Japan slowed to a 16-month low

Japan’s core inflation rate slowed to a 16-month low in November, as food prices fell.

According to data from the Ministry of Internal Affairs and Communications issued today, Friday, the consumer price index, which excludes fluctuations in food prices, rose 2.5% on an annual basis, after increasing 2.9% in October.

The index reading at these levels is the lowest level since July 2022

Inflation slowed due to a decline in electricity and gas prices, while canned food prices accelerated by 6.7%, but at a slower pace than recorded in October at 7.6%.

The core inflation rate in Japan, which takes into account all items, accelerated to 2.8%. But at the same time, hotel fees jumped by about 62.9%, reflecting strong levels of demand for tourism. However, the latest inflation reading exceeds the Bank of Japan’s target of 2%, for the 20th month in a row.

Earlier this month, economic data showed that Japan’s economy contracted by 2.9% during the third quarter, which is the first contraction in four quarters.