The rise in consumer prices in Japan has reached an unprecedented level since 1982 on the back of the decline in the yen’s exchange rate once morest the dollar, which led to an increase in the cost of imports and a significant increase in energy prices.
The inflation rate in Japan reached 3.6 percent in October in one year (excluding fresh produce), according to data published Friday, slightly higher than expected by economists polled by Bloomberg Agency (3.5 percent), compared to 3 percent. in September.
Inflation is more moderate (2.5%) if energy prices are not taken into account, but it remains higher than it was recorded in September due to the rise in prices of other products, especially foodstuffs.
Inflation in Japan since April has exceeded the rate set by the central bank as a target (2% excluding fresh products), but “cost inflation” driven by higher energy and food prices does not satisfy the institution, which still believes that conditions have not met to tighten monetary policy in Japan.
This large difference between the monetary policy of the Bank of Japan and the noticeable tightening in other advanced economies, led by the United States, led to a decline in the price of the yen once morest the dollar, and thus an increase in the cost of Japanese imports.
Japan’s trade deficit led to a decline in national gross domestic product in the third quarter by 0.3 percent from the previous quarter, according to preliminary figures published on Tuesday.
However, economists believe that the recent rise in the yen and the direction of global energy prices will allow Japan’s trade deficit to decline in the fourth quarter of this year.
Inflation is also supposed to decline from early 2023 with the introduction of a measure by Prime Minister Fumio Kishida’s government to reduce Japan’s energy bills in January.
At the end of October, the Bank of Japan raised its inflation estimate to +2.9% for the 2022/2023 fiscal year ending at the end of March (+1.8% excluding fresh produce and energy).
However, he believes that it will decline to 1.6% in 2023/2024 and remain at this level in 2024/2025.
ap
