Japan's core consumer price index gains 0.5 pct in November amid surging energy costs

TOKYO, Dec. 24 (Xinhua) -- Japan's core consumer price index (CPI) rose 0.5 percent year-on-year in November, the highest increase since February 2020, marking the third consecutive month of growth amid surging energy costs and a weak yen, government data showed Friday.

According to the Ministry of Internal Affairs and Communications, energy prices surged 15.6 percent, the largest increase since August 2008.

Due to increasing crude oil prices, kerosene and gasoline prices jumped 36.2 percent and 27.1 percent from a year earlier, respectively, while electricity bills, which track crude oil prices with a lag, also rose 10.7 percent.

Another factor behind the CPI gain was accommodation fees, which rose 57.6 percent compared to the same period last year when prices were lowered by the "Go To Travel" plan, a government subsidy program to promote regional tourism in Japan.

Mobile communications charges, which were a major drag of CPI growth, sharply dropped 53.6 percent in the reporting month since major Japanese carriers decided to offer cheaper plans amid government pressure to ease the burden on consumers.

"It's easy for energy and food companies to pass on higher costs quickly to consumers," said Toru Suehiro, a senior economist at Daiwa Securities Co., adding, "Beyond such items, price hikes have not spread, especially in the services sector hit by the pandemic."

Despite November's sharp CPI growth in Japan, the central bank of the country maintained its ultraloose monetary policies as a 2 percent inflation target is still far to reach.

Meanwhile, prices rising in Japan remained moderate compared with other nations such as the United States, which marked the sharpest gain in around four decades of 6.8 percent in November.

A ministry official said prices are "rising steadily" in Japan, where the Bank of Japan projects the core CPI to rise 0.9 percent in fiscal 2022 starting in April.

"The worry is that such items as energy and food are closer to people's daily lives so higher prices can hurt sentiment among consumers. They may start feeling that it's bad inflation accelerated by yen weakness at a time when economic conditions are not good," Suehiro added.

The so-called core-core CPI, which excludes both fresh food and energy items, fell 0.6 percent and logged its eighth straight decrease on a monthly basis.