Home Forex The forecasts of the five major banks are likely to moderate inflation

The forecasts of the five major banks are likely to moderate inflation

by SuperiorInvest


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Japan releases December Consumer Price index (CPI) data on Thursday 18 January at 11.30pm and as publication time approaches, here are the forecasts of economists and researchers at the five major banks for upcoming Japanese inflation.

The total value is expected to be 2.5% year-on-year vs. 2.8% in November, core (ex-fresh food) expected at 2.3% y/y vs. previous issue by 2.5% and core ex-energy is expected to decline by tick tt 3.7% y/y vs. 3.8%. If so, the core would be the lowest since June 2022 and close to the 2% target.

Standard Chartered

CPI inflation likely fell to 2.5% year-on-year as oil prices fell amid conflict in the Middle East. Core inflation excluding food is also likely to have eased to 2.4% year-on-year. We expect core inflation, excluding food and energy, to have eased to 3.7% year-on-year, which is still significantly high. The softening of CPI inflation in Tokyo in December supports our view. Japan’s CPI inflation is underpinned by a strong labor market, but we expect the negative pace of wage growth to prevent further improvement.

ING

Japan’s CPI inflation is expected to slow to 2.7% year-on-year in December, with falling energy and other energy prices weighing on the overall figure. However, prices in the service sector are likely to rise due to high demand for travel-related items such as accommodation and meals.

German bank

We expect core inflation ex. fresh food to 2.3% year-on-year and core ex. fresh food and energy at 3.7%, or +0.2% month-on-month for both.

SocGen

We expect the national core CPI to decline from +2.5% y/y in November to +2.3% y/y in December. The impact of high growth in 2022 will be evident, pushing food and energy down. On the other hand, we expect national core CPI growth to jump in February 2024 as the year-on-year declining contribution of measures to reduce the burden on electricity and gas bills disappears. On a year-on-year basis, we forecast an increase in the national core CPI of almost 3%.

Citi

We expect the nation’s core CPI (excluding only fresh food) to rise 2.3% year-over-year in December, down from November’s 2.5% year-over-year increase. The negative energy contribution is likely to have increased due to the benchmark. Meanwhile, CPI excluding fresh food and energy likely rose 3.8% year-on-year in December, the same as November. Core CPI inflation excluding special factors (ie energy, mobile phone charges and accommodation charges) is likely to have increased by 2.83% year-on-year in December, effectively unchanged from November’s 2.82% year-on-year increase.

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