Japan's core inflation rate has hit a 40-year high as companies continue to pass on rising costs to consumers.
The country’s core Consumer Price Index (CPI), which excludes fresh food but includes energy prices, rose 3.7% in November from a year earlier, matching economists’ forecasts.
It was the biggest rise in inflation in Japan since a 4% increase in December 1981.
Consumer prices rose for several goods in November, from fried chicken to smartphones, air conditioners to motor vehicles.
Many analysts expect core inflation in Japan to decline to the Bank of Japan’s 2% target next year as the effect of fuel price increases dissipates and the impact of government subsidies to curb electricity prices take effect.
The Bank of Japan surprised markets earlier this week by tweaking its yield control and allowing long-term interest rates to rise, a move economists see as a prelude to a further withdrawal of its massive stimulus program.
The November inflation data will likely be among the key factors Japan’s central bank considers when it decides whether to raise interest rates in 2023.
Japan's economy shrank an annualized 0.8% in the third quarter of this year as global recession risks and higher import costs weighed on consumption and business spending.
