According to Jinshi Data, inflation in Tokyo accelerated this month as the government reduced energy subsidies. Tokyo's core CPI rose 2.2% year-on-year in November, higher than 1.8% in the same period last year and the market expectation of 2%. Rising food prices also pushed up the overall inflation rate to 2.6%.
The data is likely to prompt market forecasts that the Bank of Japan will raise interest rates next month. Bank of Japan Governor Kazuo Ueda has said that if the economy performs as expected, borrowing costs will rise. The job market remains tight, with the job seekers to job seekers ratio rising to 1.25 in October and the unemployment rate rising slightly to 2.5%.
Friday’s CPI data is the last inflation report before the Bank of Japan’s December meeting. Ueda said last week he could not predict the outcome of the meeting, suggesting a rate hike would be discussed.