Tokyo

Inflation in Japan rose to its highest level since 1981 in November, as per data released on Friday (December 23). The inflation is fuelled in part by higher energy costs.

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The data released by internal affairs ministry showed that core consumer prices (excluding volatile fresh food costs) rose by 3.7 per cent in November compared to a year earlier.

The biggest price jump was seen in processed food items. Prices were also higher for electricity and durable goods like air conditioners.

The November figure is well below the sky-high levels that have sparked concern in the United States, Britain and elsewhere, but far exceeds the Bank of Japan's long-term goal of 2.0 percent.  

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Even excluding fresh food and energy, the index was up 2.8 percent. 

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"Although low by international standards, Japanese consumer price inflation at three percent to four percent is high enough to feel uncomfortable with stagnant wage growth," wrote Sarah Tan, economist at Moody's Analytics, in a note. 

The headline core consumer price index (CPI) has risen consistently since the beginning of the year, putting pressure on the Bank of Japan to tweak its longstanding monetary easing policies. 

Also Read | Japan's central bank shocks markets with yield policy change, yen strengthens  

The US Federal Reserve and other central banks have sharply hiked interest rates this year to tackle inflation. 

But Japan, which since the 1990s has swung between periods of sluggish inflation and deflation, has gone against the grain and continues to keep interest rates at ultra-low levels as it tries to kickstart its economy. 

(With inputs from inflation)

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