Japan: Core inflation steadies at near three-year high in December

In December, the core consumer price index stayed flat compared to the previous month in seasonally-adjusted terms, contrasting a 0.1% rise in November.

Core inflation remained steady at November’s 0.9% in December, which represented the joint-highest reading since March 2015. The print was in line with market analysts’ expectations. Overall inflation increased from 0.6% in November to 1.0% in December.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—moderated to 0.7% in January, down from 0.8% in December.

Japan Inflation Forecast

The Bank of Japan (BoJ) expects core inflation of 1.4% in the fiscal year ending March 2019. In the following fiscal year, the BoJ sees inflation rising to 2.3%. FocusEconomics Consensus Forecast panelists expect inflation of 0.8% in calendar year 2018, which is unchanged from last month’s estimate. In 2019, the panel sees inflation at 1.2%.