Business / Economy

Japan's inflation up 0.5% in November, as tax boosts cost of dining out

Kyodo

Core consumer prices rose 0.5 percent in November from a year earlier, affected by the consumption tax hike that increased the cost of dining out, but the pace of inflation remained far below the Bank of Japan’s 2 percent target, government data showed Friday.

The nationwide core consumer price index, excluding volatile fresh food prices, rose for the 35th straight month following the Oct. 1 consumption tax increase from 8 to 10 percent, the Ministry of Internal Affairs and Communications said. It rose 0.4 percent in October.

Without the effects of the tax increase and a free preschool education and nursery program introduced by the government also on Oct. 1, prices rose 0.2 percent.

“Although at a slower pace, the index continues to rise, so there is no change in our view that the prices are rising moderately,” a ministry official said.

Contributing to the overall increase, among other things, are costs for dining out, which rose 3.2 percent, and housing refurbishment and maintenance costs, up 5.0 percent — reflecting higher fire and earthquake insurance premiums levied from October by major insurers in the wake of a series of natural disasters last year.

“The rise in the cost of dining out as well as confectioneries such as ice cream is due to higher labor and materials costs, and it is hard to say whether it reflects strong consumer demand,” the official said.

Meanwhile, prices for private kindergarten fees plunged 95.0 percent from a year earlier due to the free preschool education program, while mobile phone fees slipped 4.8 percent after major carriers cut charges.

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