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Investing.com-- Tokyo consumer price index inflation remained unexpectedly steady in November amid high food prices, with underlying inflation also remaining well ahead of the Bank of Japan’s annual target.
Tokyo core CPI, which excludes volatile fresh food prices, grew 2.8% year-on-year in November, government data showed on Friday. The print was slightly above expectations of 2.7% and remained steady from the prior month’s reading.
A core CPI reading that excludes both fresh food and energy prices remained steady at 2.8% in November, above the BOJ’s 2% annual target. The print is closely watched as a gauge of underlying inflation by the central bank.
Headline Tokyo CPI inflation read flat at 2.7%.
Friday’s print showed Japanese food price inflation remained mostly upbeat, with rice prices continuing to increase at an outsized pace. Dairy prices also increased sharply in the month.
The country is grappling with a prolonged rice shortage due to a mix of poor harvests, an aging farming population, and some policies against importing the grain, which pushed up food prices. Higher food prices were in turn a major driver of CPI inflation this year.
Tokyo CPI inflation usually acts as a bellwether for national inflation, with November’s print indicating that Japanese inflation is likely to remain sticky. It also comes after a series of firm inflation prints through the second half of 2025.
Sticky inflation gives the BOJ more impetus to hike interest rates, with the central bank having recently signaled it will consider raising rates in its December meeting.
But rate hikes by the BOJ put it at odds with Prime Minister Sanae Takaichi’s government, which has broadly called for looser monetary conditions and more fiscal spending to support economic growth.