Japan’s December consumer inflation likely to accelerate on energy costs: Reuters poll

TOKYO (Reuters) – Japan’s core consumer price inflation may have accelerated in December, boosted by higher energy costs, with the Bank of Japan likely to raise rates next week, a Reuters poll showed on Friday.

The core consumer price index (CPI), which includes oil but excludes fresh food prices, rose 3.0% in December from a year earlier, according to a Reuters poll of 16 economists.

That would be the highest since August 2023, when the index stood at 3.1 percent.

Economists say the government’s easing of subsidies for energy costs has pushed up core inflation.

The Interior Ministry will announce CPI data at 8:30 a.m. on Jan. 24 (2330 GMT, Jan. 23).

According to the survey, the Bank of Japan may raise interest rates from 0.25% to 0.5% at its January 23-24 monetary policy meeting.

BOJ Governor Kazuo Ueda said on Wednesday that the bank will debate whether to raise rates next week, signaling that it will take on borrowing costs to prevent any market shock after US President-elect Donald Trump takes office on Monday.

“Barring significant market volatility after the US presidential inauguration, this month’s rate hike now looks like a done deal,” he said. Morgan Stanley (NYSE: ) MUFG Securities in the survey.

The data will also include exports next week, which will likely be slower than the 2.3% growth in December from a year earlier, slower than the 3.8% gain in November.

Imports are expected to have increased by 2.6%, resulting in a deficit of 53 billion yen ($341 million) in December.

Takumi Tunoda, a senior economist at the Shinkin Central Bank Research Institute, said: “Export growth is likely to be modest due to the slow recovery of auto production in addition to sluggish global production.”

The Ministry of Finance will announce the trade data on January 23 (2350 GMT, Jan. 22) at 8:50 am.

Machinery orders, a highly volatile but leading indicator of capital spending for the next six to nine months, were likely to slip 0.4% month-on-month in November after growing 2.1% in November, according to the poll.

The data will be released at 8:50 am on January 20 (2350 GMT, January 19).

($1 = 155.4100 yen)