Japan's consumer price index (CPI) inflation rose by 2.7% year-on-year in November 2024, exceeding expectations of 2.6% and marking an increase from 2.3% in October.

The core CPI, which excludes fresh food and energy costs, also saw a rise, increasing to 2.4% year-on-year in November from 2.3% the previous month, remaining above the Bank of Japan's (BOJ) target of 2% for the third consecutive month.

This inflation surge, reaching a four-month high of 2.9%, was driven by strong private consumption and improving wages, suggesting that consumers are spending more on discretionary items.

In its final meeting of the year, the BOJ provided limited guidance on future interest rate hikes, but indicated that a steady increase in inflation through 2025 could trigger action.

BOJ Governor Kazuo Ueda emphasized that the upcoming wage negotiations in spring between major labor unions and companies will be crucial for the central bank's policy decisions.

As the BOJ continues to monitor inflation trends, upcoming data for December, expected to be released next week, will likely offer further insights into the evolving economic landscape.