Source: https://www.e-stat.go.jp/en/stat-search/file-download?statInfId=000032103932&fileKind=1 and https://www.boj.or.jp/en/research/research_data/cpi/cpirev.xlsx Note: 96% in parentheses means this measure covers 96% of the household budget
COMING NEXT POST: With Trump’s tariffs being such a big factor in the Democratic triumph, the Democrats will want to lower at least some of them. They want to start with Canada, where there is some bipartisan support. However, major obstacles remain, from Trump’s veto power to divisions among Democrats over which tariffs to lower and on which countries. I’ll discuss this and its impact on Japan in the next post.
Key Points For Today:
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Inflation spikes in September to 3.2% when corrected to avoid distortions caused by government subsidies and 2.2% when not corrected (see chart at the top)
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I’ll discuss the causes and whether they are seen as persistent
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It is goods rather than services that caused the spike; goods are more energy-intensive while services are more labor-intensive
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Saying that “underlying” trends are consistent with its 2% inflation goal, the Bank of Japan now sees its mission as making sure the underlying trends don’t rise above that goal
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Observers predict hike in overnight rate to 1.5% in December and then the rise ending at either 1.75% or 2%
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