Inflation has been running extremely hot in many places, such as Europe, North and South America, Australia etc., reaching levels never seen in decades. Headline consumer inflation CPI (consumer price index) has climbed above 10%, while in Japan prices were increasing at a reasonable pace.

Inflation is still pretty low in Japan, but it is picking up, as headline consumer inflation reached 3.5% in Tokyo this month. Below are the main indicators for consumer inflation and they are all pointing up, as well as for employment.

Japan Tokyo CPI Inflation

• Headline Tokyo CPI 3.5%
• Expected 3.1%, prior was 2.8%
• Tokyo CPI excluding Fresh Food 3.4% expected 2.8%,
• Prior CPI ex fresh food was 2.8%
• 3.4% is the fastest since October 1989
• Tokyo CPI YoY excluding Food, Energy 2.2% vs 2.1% expected
• Previous CPI YoY was 1.7% (this measure of Japanese inflation is closest to the US ‘core’ CPI)

Japan Unemployment Rate

• Japan’s unemployment rate in September 2.6% vs 2.5% expected
• August unemployment rate 2.5%
• Job-to-applicant ratio is 1.34

That is quite a jump for the headline inflation rate. The ‘excluding food and energy’ which, as noted, is closest to the US ‘core’ CPI, is more subdued at 2.2%. It’s the 7th consecutive rise for this. So, all three  inflation indicators in Japan increased more than anticipated in October, which shows that inflation is transferring in Japan from the other countries as well.

Japan’s Prime Minister Kishida’s Remarks on the Next Round of Fiscal Stimulus

• Total of economic stimulus is 71.6tn JPY
• Fiscal spending for economic stimulus to total to 39trln yen
• Extra budget stimulus is 29tn JPY

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