Capstone Online CFD Trading：The annual rate of core CPI in Japan in November was 0.5%, which continued to increase slightly from October!
2019-12-20 11:39 from：CAPSTONE author：Jack
Capstone Online CFD Trading：On Friday, according to the latest data released by the Bureau of Statistics of the Ministry of Internal Affairs and Communications of Japan, Japan ’s core CPI was 0.5% in November, a slight increase from October. Analysts said that despite the increase in the consumption tax in October, it showed that weak family confidence has caused businesses to be reluctant to pass on higher costs to consumers.
This data highlights the challenges the Bank of Japan faces in raising inflation to its 2% target, as weak global demand and trade overshadow the outlook for Japan's export-oriented economy.
The Japanese government raised the consumption tax in October to help control huge public debt. Although some daily necessities are not covered by the tax adjustment, if companies pass on costs to households, it will push up overall inflation. However, some analysts said the boost to inflation from the consumption tax was offset by discounts offered by companies, and they feared that cost-sensitive consumers would be scared away by price increases.
Japan's economic growth in the third quarter was the slowest in a year. As trade disputes and weak global demand hit exports, policymakers are still under pressure to increase fiscal and monetary stimulus to boost a fragile economic recovery.
On Thursday, the Bank of Japan announced its final interest rate resolution for the year, announcing that the benchmark interest rate will remain unchanged at -0.1%, while maintaining the 10-year Treasury yield target at about 0%. It is worth mentioning that the Bank of Japan also announced the details of the ETF lending plan, which was announced by the Bank of Japan in April this year. The Bank of Japan statement stated that it maintains its target for annual government bond purchases at 80 trillion yen. The Japanese economy is likely to continue its expansion trend. Active government spending will support domestic demand.
The Bank of Japan this time adjusted its wording on overseas risks, raised its assessment of public investment and lowered its assessment of production. The Bank of Japan said that downside risks overseas were still significant. Public investment has moderately increased. Industrial production has recently fallen. If the risks increase, there will be no hesitation in further loosening monetary policy.
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