- Yusuke Shimoda, economist at Japan Research Institute
Japan's core consumer prices climbed for the first time in five months in November, whereas household spending declined, putting the Bank of Japan's view that robust consumption will boost inflation into question. The core CPI, which includes oil products but excludes volatile fresh food prices, inched up 0.1% in the reported month from a year earlier, beating expectations for a flat reading. The increase followed a 0.1% decline in October. At the same time household spending suffered the biggest annual decline in eight months, falling 2.9% in November from a year earlier. A separate report showed industrial Japan's industrial production dropped for the first time in three months in November, as exports declined more than expected. Industrial output slumped 1% in the measured month from October, compared with the forecast for a 0.5% decline. Measured on an annual basis, production was 1.6% higher.
The data is likely to keep alive expectations that the BoJ Governor Haruhiko Kuroda may introduce additional stimulus measures as early as next month. In a bid to power the world's third biggest economy and to reach the inflation target, the BoJ announced an unexpected tweak to its monetary easing programme. BoJ policymakers rolled out a series of changes, including boosting their holdings in companies dedicated to capital spending and new hiring.
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