Japan Inflation Picks Up in November But Still Below Target

Japanese inflation unexpectedly picked up in November but prices are still rising at less than half the rate targeted by the central bank. The tightest job market in decades got even tighter.

Nearly five years since Prime Minister Shinzo Abe returned to power promising to end Japan’s deflationary malaise, the economy is registering healthy growth but inflation remains well below the Bank of Japan’s 2 percent target. Energy prices have driven most of the gains in inflation as the tightest labor market in decades hasn’t fueled a strong rise in wages, meaning households have limited their spending. Given these conditions, the Bank of Japan left the settings on its unprecedented monetary stimulus program unchanged last week in its final meeting of 2017.