Japan’s 2023 core inflation hits 41-year high

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Japan’s core consumer prices rose 3.1 per cent in 2023 from the previous year, marking the fastest growth in 41 years, the government said in a report on Friday. The core consumer price index (CPI) for the year, excluding fresh food prices because of their volatility, came in at 105.2 against the 2020 base of 100, with its pace of increase fastening from 2.3 per cent in 2022, according to the Ministry of Internal Affairs and Communications.

The yearly increase, which remained above the Bank of Japan’s 2 per cent inflation target for the second consecutive year, marked the highest level since 1983, reports Xinhua news agency. It came despite government subsidies to lower household utility bills, underscoring higher import costs that were inflated by a sharp drop of the yen, a byproduct of the Bank of Japan’s monetary easing, national news agency Kyodo reported on Friday.

Food prices saw the sharpest hike in 48 years rising 8.2 per cent in 2023. In December alone, the core CPI saw a 2.3 per cent increase from the previous month, slowed from 2.5 per cent in November but remained above the Bank of Japan’s 2 per cent inflation target for the 21st consecutive month. The core-core CPI, which strips away both energy and food prices, rose 3.7 per cent, underscoring persistent inflationary pressures, the data showed.

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In a breakdown of items lifting the core CPI last month, food costs witnessed a 6.2 per cent increase, while accommodation costs increased 59 per cent as the tourism industry revived. Due to government subsidies to reduce fuel costs, energy prices dropped 11.6 per cent.