TOKYO: Japanese exports accelerated sharply in November, yet again pointing to growing momentum in the world’s third-biggest economy. There was just one catch: inflation remained stubbornly low and well off the central bank’s 2 per cent target. The combination of steady growth and benign consumer prices mean the Bank of Japan will lag other major central banks in exiting crisis-era monetary stimulus, with analysts widely expecting BoJ Governor Haruhiko Kuroda to keep the liquidity tap wide open at a meeting later this week.”Inflation expectation is in a gradual recovery trend, but a gap between firm economic indicators and weak price indexes remains wide open,” said Yuichiro Nagai, economist at Barclays Securities.
Indeed, a BoJ survey on Monday showed companies’ inflation expectations heightened only a touch in December from three months ago, despite a tight labour market and business confidence at over a decade high.
The persistently low inflation — with core prices running at an annual pace of 0.8 per cent — was also hard to square off with the robust performance of Japan Inc., which has benefited from booming exports thanks to upbeat global demand.
Separate data from the Ministry of Finance showed exports grew 16.2 per cent in the year to November, beating a 14.6 per cent gain expected by economists in a Reuters poll and accelerating from the prior month’s 14.0 per cent increase, led by a stellar sales to China and Asia.— Reuters
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