Core Inflation in Japan Hits Highest Level in 7 Months

In Japan, core inflation, excluding fresh food and energy prices, rose to its highest level since April in November. Inflation, excluding fresh food and energy prices closely monitored by the Bank of Japan (BOJ), increased from 2.3% in October to 2.4% in November. The core inflation rate, which excludes only fresh food prices, rose from 2.3% in October to 2.7% in November, surpassing economists' forecast of 2.6%. Overall inflation in Japan also increased to 2.9% in November, up from 2.3% in October, reaching its highest level since August. Masahiko Loo, a senior fixed income strategist at State Street Global Advisors, commented that the inflation data is "quite consistent with what we thought." He noted that the BOJ is "super optimistic" about the country's inflation and growth figures, but added that Governor Ueda is likely focusing on external uncertainties, particularly the influence of the new Donald Trump administration. Loo also explained that as the yen drifts toward 160 against the dollar, the Japanese Ministry of Finance may attempt to issue market warnings or, if that fails, could be pressured to raise interest rates in January to provide new support.