Inflation Accelerates in Japan, Unemployment Rate Holds at 4%

Hiruki Nakamura
29 Nov, 2013
New York City

Consumer price index increased for the fourth month in a row in October and prices rose at the fastest pace in years. Industrial output increased at a slower than expected pace in October and unemployment rate was unchanged.

[R]4:30 PM Tokyo – Consumer price index increased for the fourth month in a row in October and prices rose at the fastest pace in years. Industrial output increased at a slower than expected pace in October and unemployment rate was unchanged.[/R]

Investors focused on the latest string of economic reports and inflation picked up at the fastest pace in years as the Bank of Japan and government policies take hold.

Inflation Picks Up at Fastest Pace in 15 Years

The latest inflation showed the largest increase in consumer prices since the nation slipped to deflation trend nearly 15 years ago, according to the latest government data.

The consumer price index excluding fresh food and including energy products increased 0.9% on an annual basis in October.

The inflation gauge increased for the fifth month in a row and the largest annual increase since November 2008.

Excluding food and energy prices, CPI increased 0.3% from a year ago in October, the first increase in five years and the largest monthly increase since August 1998.

Industrial Output Rises 0.5%

Industrial output in October increased 0.5% from a month ago, second monthly increase in a row but fell short of estimates of 2% increase.

Manufacturers estimated output to increase 0.9% in November and 2.1% in December.

Unemployment Rate Unchanged in October

Unemployment rate in Japan was unchanged at 4% in October, the Ministry of Internal Affairs and Communications said today.

According to the ministry, the number of unemployed people increased 1.1% from a month ago to 2.66 million.

And, the applicants-to-jobs ratio increased to 0.98% in October from 0.95% in September, the Health, Labor and Welfare Ministry said in a separate report.

Stocks Surge in November

Stocks on Tokyo closed down on the last day of trading but the major indexes gained nearly 2% in the week and soared more than 9% in the month.

The Ministry of Economy reported retail sales in October climbed 2.3% to 11.203 trillion yen from a year ago month.

The Nikkei 225 Stock Average fell 65.25 or 0.4% to 15,661.87 and the Topix slid 2.38 to 1,258.66. For the week, Nikkei jumped 1.8% and for the month surged 9.3%.

The yen fell to 102.02 against one dollar.

Ocean freight shipping companies gained after the measure of freight rate jumped in Europe. The Baltic Dry Index soared 9.3% on Thursday in London trading and extended gains for the fourth day in a row.

Mitsui O.S.K. increased 1.1%, Kawasaki Kisen Kaisha Ltd soared 1.7%.

Stocks in Review

Toyota Motor Corp fell 10 yen to 6,380 yen.

Honda Motor Co. gained 25 yen to 4,330 yen after the automobile company reported worldwide production in October surged 21% to a monthly record of 419,232 units. Total overseas production outside of Japan jumped 23.4% to 328,525 units.

Honda said in October, automobile sales in Japan surged 48.9% to 65,337 units and total exports from Japan in October soared 65.7% to 11,401 units.

Nissan Motor Co Ltd slid 3 yen to 936 yen and said global production in October climbed 13.3% to 465,494 units but in Japan plummeted 19.4% to 81,274 units.

The car-maker added production in the U.S. surged 30% to 78,737 units and outside of Japan soared 23.9% to 384,220 units from a year ago month.

In the U.K., production increased 5% to 52,407 units and in China production dropped 16.6% to 11,412 units.

Nissan reported global sales in October jumped 21% to 413,971 units and sales in the U.S. rose 14.2% to 91,018 units. Mexico sales increased 8% to 21,860 units. In Europe, sales rose 6.6% to 54,519 units.

In Europe, sales increased 6.6% from a year ago to 54,519 units on the new Micra model launch. China sales soared 127.8% to 114,700 units. Sales in other regions decreased 4.6% to 72,258 units.

Softbank Corp slipped 140 yen to 8,290 yen. Fast Retailing Co. slid 150 yen to 38,800 yen.

Konami Corporation climbed 3.6% to 2,663 yen after the government said it will submit in current session of parliament a bill to legalizing casinos.

After the news, Dynam Japan Holdings Co Ltd, the Hong Kong listed gaming company, surged 10%.

Shimizu Corporation slipped 1.2% to 479 yen and the company plans to build a belt of 250 miles wide solar panels around the equator of orbit and relay the constant supply of energy on earth stations from lasers or microwave transmission.

Tokyo Electric Power Co Inc closed unchanged at 546 yen and media reports suggested that the electric power supplier intends to offer corporate bonds to the public in fiscal 2016.