MNI BRIEF: Japan Nov Tokyo Core CPI Rises 2.3% Vs. Oct 2.7%

The Tokyo core inflation rate decelerated to 2.3% y/y in November from October's 2.7%, the lowest level since July 2022, weighed down by lower energy and food prices, data from the Ministry of Internal Affairs and Communications showed on Tuesday.

Energy prices fell 16.7% y/y in November compared to October's 14.1% drop, while foods prices excluding perishables rose 6.4% versus 7.3% the prior month. Processed food prices, a key Bank of Japan indicator, rose 7.8%, down from October's 8.8%.

Tokyo core-core CPI (excluding fresh food and energy) -- a key indicator in the underlying trend of inflation -- rose 3.6% y/y in November, also slowing from October's 3.8%, but staying above the bank's 2% target for the 18th straight month. Prices for eating and drinking services, another key BOJ focus, rose 5.0% in November after increasing 5.3% in October.

The data indicated that the nationwide November CPI rate will likely fall from October’s 2.9%, supporting the Bank of Japan’s view that the impact of cost-push price hikes will wane. Focus will now shift to whether the y/y rise in core CPI will continue to slow and fall below 2.0%, impacting the BOJ's price forecasts due to be updated in January.