Consumer inflation in Japan’s capital rises at fastest pace in 40 years

By Takahiko Wada and Leika Kihara

TOKYO (Reuters) – Core consumer prices in Japan’s capital, considered a leading indicator of nationwide trends, rose 3.6% in November from a year earlier, marking the fastest annual pace in 40 years in a sign of broadening inflationary pressure.

The rise in the Tokyo core consumer price index (CPI), which excludes fresh food but includes fuel costs, exceeded a median market forecast for a 3.5% gain and accelerated from a 3.4% increase in October, government data showed on Friday.

Core consumer inflation in Tokyo remained above the Bank of Japan’s 2% target for six straight months in November, a sign that rising raw material costs were steadily pushing up a broad range of prices for daily necessities.

The Tokyo core-core CPI index, which strips away both fresh food and fuel costs, rose 2.5% in November from a year earlier, pacing up from a 2.2% gain in October.

The Bank of Japan has kept interest rates ultra-low on the view the recent rise in inflation will prove temporary, remaining an outlier among a wave of central banks tightening monetary policy to combat soaring inflation.

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