Japan's inflation hits 40-year high as weak yen fans import costs

By Reuters November 17, 2022 | 06:17 pm PT

A woman chooses products at a drug store in Tokyo, Japan October 21, 2022. Photo by Reuters/Kim Kyung-Hoon

Japan's core consumer inflation accelerated to a 40-year high in October as a weak yen pushed up the cost of imported commodities, which were already surging due to global supply constraints.

The data suggests Japanese firms may be shaking off their deflationary mindset as they gradually raise prices of everything from fuel to food in response to higher costs.

The nationwide core consumer price index (CPI), which excludes volatile fresh food prices but includes energy, was 3.6% higher in October than a year earlier, versus a 3.5% rise expected by economists, and accelerating from the prior month's 3.0% annual gain.

The jump was the largest since February 1982.

It also confirmed CPI growth remained above the Bank of Japan's (BOJ) 2% inflation goal for a seventh straight month.

"I haven't changed my view that the rise will start to slow down soon," said Takeshi Minami, chief economist at Norinchukin Research Institute, noting declines in global grain prices.