Japan's inflation accelerates, central bank turns

Aihuicha, November 24: Japan's interior ministry released data on Friday showing that Japan's core CPI recorded an annual rate of 2.9% in October, higher than the Bank of Japan's 2% target for the 19th consecutive month, compared with 2.8% previously. Economists expect the core CPI to jump to 3 percent as the government reduces subsidies for utilities. The annual rate of core CPI has accelerated for the first time in four months, contrary to the Bank of Japan's view that inflation will slow, which may strengthen expectations of policy normalization. The rising cost of living has had a negative impact on consumer spending and led to a contraction in Japan's economy in the last quarter, suggesting a possible risk of normalization of monetary policy, putting Kazuo Ueda, the governor of the Bank of Japan, in a dilemma over whether to adjust policy.