Japan inflation eases to 2.5 percent in November

TOKYO

Japanese consumer inflation slowed to 2.5 percent year-on-year in November, down from 2.9 percent the previous month, as electricity and gas bills declined, government data showed on Dec. 22.

The figure for the world's third-largest economy, which excludes volatile fresh food prices, was in line with market expectations in a Bloomberg survey.

It is the lowest increase in prices since July 2022, as electricity and gas bills declined while the cost of accommodation and telecommunications rose, according to the Internal Affairs Ministry.

The data comes after the Bank of Japan (BoJ) earlier this week maintained its long-standing, ultra-loose monetary policy and offered no guidance on its plans for the new year, sending the yen down against the dollar and boosting stocks.

Speculation had been swirling for weeks that central bank officials would shift away from negative interest rates and their tight grip on bond yields as prices tick above the central bank's two-percent inflation target.

BoJ governor Kazuo Ueda has repeatedly said that "a virtuous cycle of wages and prices" is needed to confirm that the bank's inflation target can be achieved sustainably, referencing an expected rise in wages early next year after annual union negotiations.

Japan, like other economies around the world, has seen prices rise on the back of the Ukraine war, while a weaker yen has also made imports more expensive.

Unlike other major central banks that have raised interest rates, the Bank of Japan has stuck to its ultra-loose monetary policy in the expectation that inflation will ease, adding pressure on the yen.