JAPAN DATA
Japan nationwide Oct CPI prints were a little above market expectations. The headline printed in line with consensus at 2.3%y/y, versus 2.5% prior. The core ex fresh food measure was 2.3%y/y, against a 2.2% forecast and 2.4% prior outcome. The core measure which also excludes energy was 2.3%y/y against a 2.2% forecast and 2.1% prior.
- In m/m terms, headline CPI rose 0.4%, while goods and services prices were up this much as well in seasonally adjusted terms. The core ex fresh food measure rose 0.3%, while the ex energy measure was +0.4%m/m.
- The measure which excludes all food and energy rose 0.4%, but remained fairly benign in y/y terms at 1.6%.
- The sub-category details were all quite firm in m/m terms. We saw either the same m/m rise as Sep or a stronger pace for all categories except for clothing and fresh food. Entertainment rose 0.8%m/m, after a -1.8% dip last month. Utilities rose 0.6%m/m after a -7.1% fall in Sep as well.
- Utilities in y/y terms eased to 3.2% from 8.8% in Sep, with base effects and government action on subsidies last year having an impact. Other y/y outcomes were mostly similar to the Sep outcome by sub-category.
- Overall, the data will add to focus on the Dec BoJ meeting outcome, particularly in light of Ueda's comments yesterday( cannot predict the outcome of the meeting). The core measures holding above 2%, with the ex fresh food/energy measure trending a little higher may give the central bank more confidence in the inflation outlook, see the chart below (this measure is the white line on the chart).
Fig 1: Japan CPI, Core Measures Holding Above 2% Y/Y
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