Japan’s Dec consumer inflation hits fresh 41-year high

TOKYO  – Japan’s core consumer prices in December rose 4 percent from a year earlier, double the central bank’s 2-percent target and hitting a fresh 41-year high, data showed on Friday, adding to recent growing signs of mounting inflationary pressure.

The data will likely keep alive market expectations that the Bank of Japan (BOJ) will soon end its yield control policy and allow interest rates to rise more, analysts say.

The increase in the core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, matched a median market forecast and followed a 3.7- percent annual gain seen in November.

The annual rise in core CPI thus exceeded the BOJ’s 2 percent target for a ninth straight month.

Core-core CPI, which strips away both fresh food and energy costs, was 3 percent higher in December than a year earlier, accelerating from a 2.8- percent gain seen in November.

The BOJ kept monetary policy ultra-loose on Wednesday but raised its inflation forecasts in fresh quarterly projections, as companies continued to pass on higher raw material costs to households.

Many market players expect the central bank to phase out yield curve control, a policy under which it caps long-term interest rates around zero, when dovish governor Haruhiko Kuroda’s second, five-year term ends in April.