Japan core inflation rises to 21%

Core inflation in Japan accelerated to 2.1% in September, reaching its highest level this year, driven by the yen's depreciation and rising energy import costs. The Bank of Japan's preferred inflation measure, which excludes food and energy, stood at 2.4%, while overall consumer goods inflation increased to 2.8%. Inflation was impacted by higher oil import costs resulting from a shift to more expensive U.S. sources, with the yen dropping to 156.15 against the dollar. Experts from "Capital Economics" anticipate the central bank will raise interest rates in December, following a hike to 1.25% in September, to support the normalization of monetary policy. Japanese stocks declined after the data release, with the Nikkei 225 index falling by 1.62%. The Finance Minister affirmed that Japan is approaching a phase of sustained inflation supported by wage growth, with discussions underway to reduce food taxes and provide direct support to workers. Meanwhile, the Economy Minister emphasized the need to study inflation indicators and gross domestic product figures before determining an end to the economic recession.

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