(Bloomberg) -- Japanese consumer prices rose at a faster pace in November as higher energy costs offset the impact of sharp cuts in mobile phone fees.
Consumer prices, excluding those for fresh food, gained 0.5% compared with a year earlier, the ministry of internal affairs reported. Economists had forecast a 0.4% increase.
Rises in global commodity prices and higher import costs on a weaker yen have pushed Japan’s inflation back above zero. But the impact on the consumer price index has been muted in Japan compared with other nations mainly because of government-initiated cuts to mobile phone fees.
Japanese companies are facing the biggest cost pressure in four decades, and some companies are opting to pass higher costs to consumers while many remain reluctant to do so out of fear of losing customers to competitors.
What Bloomberg Economics Says...
“Japan’s core inflation looks set to come in at a yawn-inducing 0.4% in November. Strip out mobile phone charges, though, and it might get your blood racing -- we estimate that narrower measure could approach 2%.”
--Yuki Masujima, economist
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More details:
- Overall, consumer prices increased 0.6%. Analysts had expected an increase of 0.5%.
- Prices, excluding those for fresh food and energy, dropped 0.6%, matching a forecast by analysts.
- Energy prices rose 16%, contributing 1.1 percentage point to the overall inflation figure.
- A 54% drop in mobile phone fees, dragged the overall index down by 1.5 percentage point.
Unlike in the U.S. and Europe, the inflationary pressure has yet to cause monetary policy changes in Japan with the central bank pledging to keep up its stimulus until the 2% inflation target is achieved. Bank of Japan Governor Haruhiko Kuroda said last week a weaker yen has been a plus for the economy as a whole by boosting exports and the value of earnings abroad.
Prime Minister Fumio Kishida is looking to make companies raise pay for workers by larger amounts through bigger tax incentives. The BOJ has long argued that higher wages are a key to increasing consumer spending and securing a sustained gain in inflation. His economic stimulus measures approved last month include help for people and businesses to deal with higher energy prices.
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