Econintersect: Japan inflation rate continues to move toward the Abe government’s goal of 2%. The CPI for Novemebr 2013 was up 1.5% from a year earlier, the same year-over-year growth as in October. Energy had the largest gain of any component of the index, up 5.7%. The core inflation gain (total minus food and energy, but including alcoholoc beverages) was up 0.6% while the widely followed total minus fresh food was up 1.2%. All gains are year-over-year.
There is sosme confusion in media reports about the core inflation rate. Most report the number for total minus fresh food as core CPI, yet the official report from the government refers to core inflation as “All items, less food (less alcoholic beverages) and energy“.
Trading Economics has the following graphic for Core CPI (year-over-year), using the officially defined core, with the zero line emphasized by Econintersect:
With the exception of the financial crisis year of 2008, the inflation seen in the second half of 2013 is the largest in the past 15 years. Before June 2013 almost 79% of the monthly reports since 1998 had been negative year-over-year. The Abe government initiated the current monetary expansion to try to break that long reign of deflation.
The following summary table is from the official government website, the Staistics Bureau of the Ministry of Internal Affaitrs and Communications.
According to The Wall Street Journal, most of the inflation is coming from secondary effects of the higher cost of energy and other imports due to the 20% depreciation in the yen versus the U.S. dollar in 2013, even when direct energy costs are removed.
- Japan November 2013, Ku-area of Tokyo December 2013 (preliminary) (Statistics Bureau, Ministry of Internal Affaitrs and Communications, 27 December 2013)
- Japanese Consumer Prices Post Solid Gain (Kosaku Narioka, The Wall Street Journal, 29 December 2013)
- Japan Core Inflation Rate (Trading Economics, 30 December 2013)