Monday December 31, 2007

Japan inflation at fastest pace in more than 9 years

bloomberg.com :

Japan's inflation rose at the fastest pace in more than nine years in November and industrial production and household spending declined, signaling rising oil costs may derail the economy's longest postwar expansion. Core consumer prices, which exclude fresh food, climbed 0.4% from a year earlier, the statistics bureau said today [28 Dec 2007] in Tokyo.

Factory output slid 1.6% from a month earlier. Wages fell and employment prospects worsened as job seekers outnumbered vacancies for the first time in two years, the Labor Ministry said. "Japan's economy is entering into a new phase of accelerating inflation and slowing growth," said Susumu Kato, chief economist at Calyon Securities in Tokyo. "The bank will probably keep rates on hold in the next two to three quarters."

Food and oil costs are fanning inflation across Asia. South Korea's consumer prices rose to a three-year high in November and China's inflation was the quickest in 11 years. Singapore's consumer prices rose the most in 25 years.

- So, Japan is going into "accelerating inflation and slowing growth" - the classic definition of stagflation. The fires of inflation are starting to rage across Asia. 2008 will be very interesting.

See also :

1. Japan shows first inflation signs as core CPI rises 0.1%
2. China CPI inflation surges to 11-year high of 6.9% on food, fuel
3. Singapore CPI inflation hits 25-year high of 4.2% in November

(2007-12-31 23:12:24 SGT) [Biz] Permalink

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