Tokyo inflation likely accelerated on suspended energy subsidies: Reuters poll
FILE PHOTO: A view of a vegetable stand with prices at a supermarket in Tokyo, Japan, March 24, 2023. REUTERS/Androniki Christodoulou/File Photo
TOKYO : Consumer inflation in Tokyo likely accelerated in December on higher food costs and after the government's suspension of its gas and electricity subsidies, a Reuters poll showed on Friday.
The expected pickup could prod the Bank of Japan, which decided to keep interest rates unchanged at 0.25 per cent on Thursday, to raise borrowing costs in the new year.
The core consumer price index (CPI) in Tokyo, a leading indicator of nationwide price trends, was expected to have sped up to 2.5 per cent year-on-year in December from 2.2 per cent in November, the median forecast of 17 economists showed.
"With the end of the subsidies for electricity and city gas provided by the government, energy prices are expected to rise, pushing up the core CPI significantly," said analysts at SMBC Nikko Securities. The core CPI includes oil products but excludes fresh food prices.
A higher rate of increase in food costs, including rice, is expected to contribute to a rise in inflation as well, the analysts said.
The government, though, is set to revive subsidies for electricity and gas prices for three months from January to ease high fuel costs.
Japan's nationwide core CPI, which excludes fresh food but includes energy items, rose 2.7 per cent in November from 2.3 per cent a year earlier, government data showed on Friday.
The internal affairs ministry releases December Tokyo CPI data on Dec. 27 at 8:30 a.m. Japan time (Dec. 26 at 2330 GMT).
Meanwhile, Japan's industrial output likely contracted 3.4 per cent in November from a month ago, the poll showed. That would follow October's 2.8 per cent gain.
Analysts attributed the November decrease to lower output in production machinery such as semiconductor-manufacturing equipment compared with October, and in transport machinery due to production cutbacks at a major overseas aircraft manufacturer.
The industry ministry releases the factory output data on Dec. 27 at 8:50 a.m. Japan time (Dec. 26 at 2350 GMT). It will also announce retail sales figures, which were expected to have jumped 1.7 per cent in November from a year ago.
Japan's jobless rate in November was likely 2.5 per cent, unchanged from October, while the jobs-to-applicants ratio was expected to have remained at 1.25, according to the poll.
The jobs data will be published at 8:30 a.m. on Dec. 27.
