Core Consumer Price Inflation on the Rise

A recent Reuters poll indicates that Japan's core consumer price inflation likely accelerated in November, driven by persistently high rice prices and the phasing out of utility subsidies. The core consumer price index (CPI), which includes oil products but excludes fresh food prices, is expected to have risen 2.6% in November from a year earlier, compared with 2.3% in October, according to a poll of 18 economists.

Exports and Imports Dynamics

Exports are expected to have risen 2.8% in November from a year earlier, albeit slowing from a 3.1% increase in October. Imports, on the other hand, are estimated to have expanded 1% from a year earlier, resulting in a deficit of 688.9 billion yen ($4.50 billion). The yen's weakness since mid-September is likely to have boosted the value of exports, despite sluggish global trade.

Machinery Orders as a Leading Indicator

Machinery orders, a highly volatile but leading indicator of capital spending for the coming six to nine months, probably rose 1.2% in October from the previous month, following a 0.7% drop in September, according to the poll. The finance ministry will publish the trade data on December 18, while the Cabinet Office will announce the machinery orders data on December 16.