JAPAN DATA: CPI Close To Expectations, Softer Detail Outside Of Utility Spike

Japan National CPI for Nov was fairly close to market expectations. The headline rose 2.9%y/y, in line, and against a prior 2.3%. The core ex fresh food measure was slightly above market forecast at 2.7% y/y (2.6% expected and 2.3% prior). The ex fresh food and energy measure was 2.4%, in line and against a prior 2.3% outcome. 

• The chart below plots these three measures and the trend is reasonably positive as we approach end 2024, relative to the BoJ's 2% inflation goal. Base effects are likely to support headline and the ex fresh food measure as we progress into early 2025 as well.
• In terms of the detail, headline rose 0.6%m/m, while the core measures were also positive in m/m terms. Good prices rose 0.9%m/m, while services gained 0.2%, although these are typically revised back to flat.
• By segment, outside of a 3.0%m/m rise in utilities, the detail was a little softer. Household goods fell -06%m/m, entertainment down -0.1%. Other categories mostly saw softer outcomes relative to Oct as well.
• Note with PM Ishiba reinstating energy subsidies from Jan to Mar next year, the rise in utility inflation is likely to be tempered.
• The data is unlikely to shift BoJ thinking, particularly after yesterday's BoJ outcome, with Ueda waiting for further information in the new year around wages/international developments before deciding on the timing of the next policy shift. 

Fig 1: Japan National CPI Y/Y Trends