Inflation in Tokyo rose at its fastest pace in 40 years, up from 3.5% in October to reach 3.8% in November, putting more pressure on the Japanese economy and the dovish central bank.
According to the data from the Statistics Bureau, the core consumer price index (CPI) in Tokyo rose 3.6% this month, indicating the highest pace since 1980, which was higher than the 3.5% expected by economists and 3.4% last month.
Despite inflation at 40-year high and Japanese yen at decades low, hurt by increased raw material prices, the Bank of Japan continued to keep its policy rate balance at -0.1%.
Japan’s consumer confidence dropped to 29.9 in October.
Japan’s economy unexpectedly shrank in the third quarter as the yen’s record decline crushed growth momentum, leaving the country’s recovery from the pandemic in a vulnerable position amidst growing fears of a worldwide recession.
Official data revealed that after three consecutive quarters of expansion, Asia’s second-largest economy shrank by 0.3 percent during July-September.
This underperformance is equal to a 1.2% annualized decline.
Private consumption, which accounts for more than half of Japan’s $5 trillion economy, increased by 0.3%, compared to 1.2% in the previous quarter.