Japan’s annual inflation rate surged to 2.9% in November 2024, up from 2.3% in the previous month, marking the highest reading since October 2023. The sharp rise was largely driven by soaring food prices, which climbed 4.8%, the steepest increase in eight months. Notable contributors included fresh vegetables and fresh food, reflecting the growing pressure on household budgets amid rising living costs.

Rising Energy Costs Exacerbate Inflation

Energy prices significantly added to inflationary pressures, with electricity costs jumping 9.9% compared to 4.0% in October. Gas prices also surged to 5.6%, up from 3.5%, following the absence of energy subsidies since May. These increases highlight the ongoing challenges faced by consumers as energy expenses continue to strain finances.

Price Hikes Across Sectors

Inflation extended to several other sectors, with housing costs rising to 0.9% from 0.8% and transportation seeing a notable uptick to 0.9% from 0.5%. Furniture and household utensils, healthcare, recreation, and miscellaneous items also experienced price increases, although some categories like communication and education saw slight deflation. This broad-based rise underscores the far-reaching impacts of inflation across the Japanese economy.

Core Inflation and Monthly CPI See Significant Gains

Core inflation, which excludes volatile food and energy prices, rose to a three-month high of 2.7% in November, surpassing market expectations of 2.6%. Meanwhile, the Consumer Price Index (CPI) increased by 0.6% month-on-month, marking the highest figure in over a year. These trends suggest persistent inflationary pressures, making it a critical issue for policymakers and consumers alike as they navigate Japan’s evolving economic landscape.