Japan's Dec core inflation slows for 2nd straight month
By Leika Kihara and Takahiko Wada
TOKYO (Reuters) -Japan's core inflation stayed above the central bank's 2% target in December but slowed for a second straight month, data showed on Friday, reinforcing expectations it will be in no hurry to phase out its massive monetary stimulus.
The data, which matched median market forecasts, highlights receding inflationary pressure from raw material imports, and heightens the chance the Bank of Japan will maintain ultra-low interest rates at next week's meeting.
The core consumer price index (CPI), which excludes fresh food but includes energy costs, in December rose 2.3% from a year earlier, government data showed, marking the slowest pace of increase since June 2022.
It followed a 2.5% rise in November.
The slowdown was largely due to a 11.6% fall in energy costs, which reflected the base effect of last year's sharp rise and government subsidies to curb gasoline and utility bills.
The price of food and daily necessities continued to rise, in a sign of pain higher living costs is inflicting on households.
The «core core» index that strips away both fresh food and energy prices, closely watched by the BOJ as a better gauge of the broader price trend, in December rose 3.7% from a year earlier after a 3.8% gain in November.
Services prices rose 2.3% in December from a year earlier, the data showed, underscoring broadening inflationary pressure.
Japan's core consumer inflation has exceeded the BOJ's 2% target since April last year as soaring raw material costs prodded many firms to pass on higher costs.
After peaking at 4.2% in January, inflation has slowed due to easing cost-push pressures in line with the BOJ's forecasts.
The key from here is whether wage hikes accelerate enough to
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