Japan’s inflation accelerated to the fastest pace in five years in November, topping 1 percent and making progress as the central bank tries to target a 2 percent inflation rate through bold monetary stimulus, various news outlets reported.
According to Bloomberg, prices excluding fresh food rose 1.2 percent from a year earlier, the statistics bureau said today in Tokyo. And industrial output rose 0.1 percent from October, which was less than forecast, in a risk for projections of an acceleration in growth this quarter, the news site noted.
For a third straight month, Factory output climbed, while retail sales jumped and job availability reached a six-year high, bolstering signs that the economic recovery in Japan is picking up pace, according Reuters.
However, doubts did remain over whether inflation can accelerate quickly enough in the world's third-largest economy to meet the BOJ's target -- set back in April -- of a 2 percent inflation in about two years, the site noted.
"Consumer prices show signs of being pushed up by the weak yen, so we're still looking at cost-push inflation. It remains to be seen how strongly wages will rise," Yasuo Yamamoto, senior economist at Mizuno Research Institute in Tokyo, said, according to Reuters.
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The core consumer price index (CPI), which includes oil products but excludes costs of fresh food, rose 1.2 percent in November from a year earlier, government data showed on Friday -- somewhat in line with a median market forecast for a 1.1 percent climb. It was the speediest pace of growth since a 1.9 percent increase in October 2008, when a rise in world commodity prices pushed import costs up, Reuters reported.
And the so-called core-core inflation index -- food and energy prices are excluded and it is similar to the core index used in the U.S. -- increased 0.6 percent in the year to November. It was the second month in a row of gains and the largest increase since August 1998, the news site noted.
Factory output rose 0.1 percent last month, which was less than a median market forecast for a 0.4 percent increase. But government-surveyed manufacturers believe production will climb this month and in January 2014.
In Japan, economic growth slowed down in the third quarter because of soft exports after the country outpaced its G7 counterparts in the first half of 2013, Reuters reported.
Analysts believe that the Japanese economy will pick up again as consumers attempt to beat a sales tax hike in April 2014. But the analysts are worried about what the higher tax could do to the economy in the second half of the upcoming year.
BOJ Governor Haruhiko Kuroda has said the negative effects of the sales tax hike won't get in the way of reaching the bank's 2 percent price target.
For years, wages have barely gotten higher in Japan. But according to the governor, they must in order for the bank to nail down that price and for household spending to maintain its muscle, Reuters explained.