Staff Reporter
Japan’s core consumer price inflation is projected to reach a 17-month high in January, driven by soaring food costs and reduced energy subsidies, according to a recent Reuters poll.
The core consumer price index (CPI), which accounts for oil products while excluding fresh food, is expected to have climbed 3.1% year-over-year in January. This marks an increase from December’s 3% rise and represents the fastest annual growth since August 2023.
Shunpei Fujita, an economist at Mitsubishi UFJ Research and Consulting, commented, “As food prices continue to escalate and government subsidies for oil refiners diminish, we anticipate a wider year-on-year increase compared to the previous month.”
Essential items like rice and vegetables have seen significant price hikes in recent months. In response, the Japanese government plans to release 210,000 metric tons of stockpiled rice to alleviate distribution issues and stabilize prices.
Japan’s internal affairs ministry is scheduled to release the January consumer price index (CPI) data at 8:30 a.m. on February 21 (2330 GMT on February 20). This announcement comes as the nation grapples with significant trade deficit issues.
According to a recent poll, Japan’s exports are expected to rise by 7.9% in January compared to a year earlier, a notable increase from December’s 2.8% growth. Conversely, imports are projected to expand by 9.7% year-over-year, resulting in a substantial trade deficit of 2.1 trillion yen ($13.76 billion). December saw imports increase by 1.8%.
“The trade balance is significantly in deficit this January, as exports typically experience seasonal declines,” stated Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
In addition, machinery orders, which serve as a leading indicator of future capital spending, are anticipated to have edged up by 0.1% in December from the previous month, following a stronger 3.4% increase in November.
