© Reuters. FILE PHOTO: A shopper wearing a protective mask pushes shopping at the mall of Japanese supermarket group Aeon as the mall reopens amid the coronavirus disease (COVID-19) outbreak in Chiba, Japan, May 28, 2020 vehicle.Reuters/Kim Kyung-hoon
TOKYO (Reuters) – Japan’s core consumer inflation likely hovered at a near two-year high in December as soaring fuel and raw material costs continued to push up household living costs, a survey showed on Friday.
But inflation in Japan is still well below that of other major economies, including the United States, and strong demand and a tight labor market are pushing up prices enough for the central bank to consider raising interest rates several times this year.
The national core consumer price index (CPI) likely rose 0.6% in December from a year earlier, according to the median forecast in a survey of 18 economists.
That would be the fastest pace of growth since February 2020, up from 0.5% in November.
“Prices in Japan have been weak, but we are seeing a knock-on effect of higher import costs due to a weaker yen and soaring raw material costs,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
The survey also showed that Japan’s exports likely rose 16.0% year-on-year in December, the 10th consecutive month of growth, following a 20.5% increase the previous month.
The value of imports is expected to surge 42.8% in December due to higher energy and raw material costs, the survey showed.
Core machinery orders likely rose 1.4% in November from the previous month, the second straight month of increases in capital spending, the survey showed.
The government will release CPI data on January 21 (2330 GMT, January 20) at 8:30am and on January 20 (2350 GMT, January 19) at 8:50am Trade data, machinery orders data is released at 8:50AM Jan 17 (2350 GMT, Jan 16).
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