Japan’s December consumer inflation is likely to hit a 2-year high: Reuters poll Reuters

TOKYO (Reuters) – Consumer inflation in Japan is likely to rise to a two-year high in December as rising fuel and commodity costs continue to drive up the cost of living for families, a Reuters poll showed on Friday.

But inflation in Japan remains slower than in other major economies, including the United States, where strong demand and tight labor markets are driving prices high enough for central banks to see several interest rate hikes.

The National Consumer Price Index (CPI) is likely to have risen 0.6% in December from a year earlier, according to the average forecast of a survey of 18 economists.

This would mark the fastest growth rate since February 2020, with an increase of more than 0.5% in November.

“Prices in Japan have been weak, but we are seeing the impact of higher import costs as a result of weak yen and rising raw material costs,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.

The survey also showed that Japanese exports rose by 16.0% year-on-year in December, the 10th consecutive month of expansion, after rising by 20.5% in the previous month.

According to the survey, imports will grow by 42.8% in December as a result of rising energy and raw material costs.

Demand for basic machinery is likely to have grown by 1.4% in November compared to the previous month, with a positive increase in capital expenditure in the second month, according to the survey.

The government will provide trade data at 8:30 a.m. on January 21 (2330GMT, January 20), trade data at 8:50 a.m. on January 20 (2350GMT, January 19), and machine order data at 8:50 p.m. on 17 January (2350 GMT, 16 January).