Japan’s consumer prices stopped falling last month for the first time in 13 months, ending the country’s longest deflationary stretch since 2011.
Prices, excluding those for fresh food, were unchanged from a year earlier, the Japanese Ministry of Internal Affairs and Communications reported yesterday in a result that matched an estimate from analysts.
Rising costs for hotels, processed food and energy cushioned the impact of mobile phone rates that have fallen sharply under pressure from outgoing Japanese Prime Minister Yoshihide Suga.
Despite last month’s slightly improved reading, Japan’s weak inflation pulse has trapped the Bank of Japan in a holding pattern while the Federal Reserve and other central banks move toward reining in pandemic stimulus. The bank on Wednesday kept its key stimulus tools in place and would likely do so for the foreseeable future.
“At least we can say prices aren’t falling, so the BOJ can continue to keep a close eye on it, without taking additional easing steps,” NLI Research Institute economist Taro Saito said.
While producer prices have jumped, climbing 5.5 percent last month, most Japanese firms aren’t choosing to pass those costs on to customers.
Global supply-chain snags and surging commodities prompted the Paris-based Organisation for Economic Co-operation and Development this week to raise its forecast for consumer price inflation this year and next in every G7 country, except Japan.
Last month’s inflation report continued to show the numbers being swayed by government initiatives that analysts say have made it hard to grasp underlying price trends.
The cost of hotel rooms rose nearly 50 percent compared with the level last summer, when the government’s “Go-To Travel” discounts to help the ailing tourism industry had just gone into effect.
Moving in the opposite direction, the cost of mobile phone service fell by almost the same amount, shaving 1.2 percentage points from the overall price index. Getting phone companies to slash rates was a top priority of the Suga administration.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS