Japan’s Topix index swung between gains and losses after a three-day decline, as data showed core consumer prices, a leading indicator of nationwide price trends, dropped for a 9th straight month in November, suggesting that the economy still lacks enough momentum to jumpstart inflation toward the central bank’s ambitious 2% target.
The core consumer price index, which includes oil products but excludes volatile fresh food prices, decreased 0.4% in November, compared with a median market forecast for a 0.3% fall. Tokyo core consumer prices, available a month before the nationwide data, fell 0.6% in December from a year earlier, as weak clothing sales forced retailers to cut prices.
The Yen also fell on Monday after climbing 0.7% over the previous 4 sessions while Crude climbed for a 7th straight session before OPEC and other producing nations start reducing output. Asian stocks were mostly higher on Tuesday, in thin trade and with little to guide them as Australia, New Zealand and Hong Kong financial markets were closed on Monday for Christmas holidays, whereas those in the US and most of Europe resumed trading.
However, analysts expect inflation to quicken next year reflecting a recent rebound in oil costs and Yen declines that push up import prices, easing pressure on the Bank of Japan (BoJ) to top up an already massive stimulus program.
Trading is expected to be thin this week as financial markets close out a volatile year. US equities are trading near a record, the Dollar is around a multiyear high and crude oil has climbed to a 17-month peak as traders have powered past shocks from the Brexit vote in the UK to Donald Trump’s victory in the US presidential election.