Core consumer prices in Japan gained 4.0 percent in December from a year earlier, the highest level since 1981 and twice the pace envisaged by the Bank of Japan, as higher energy and food prices increasingly squeeze household budgets, government data showed Friday.

The core consumer price index excluding volatile fresh food items was above the Bank of Japan's 2 percent inflation target for the ninth straight month, underscoring persisting inflationary pressure despite the central bank's view that it is only transitory.

For 2022, core CPI gained 2.3 percent from a year earlier, the Ministry of Internal Affairs and Communications said. The pace was the fastest since 1991 when the effects of past consumption tax hikes were stripped away.

The inflation data came after the BOJ resisted Wednesday market pressure to change its ultralow rate policy, a month after its surprise decision to raise its ceiling on long-term government yields jolted financial markets. Based on the central bank's latest forecasts, the 2 percent target will not be achievable in the near term.

Still, price hikes have been prevalent in Japan, known for its past experience with years of chronic deflation, as companies face increased pressure to pass on higher raw material and other costs to consumers.

Food prices jumped 7.4 percent in December, reflecting higher prices of everything from hamburgers, potato chips to chocolate and mayonnaise.

Energy prices surged 15.2 percent. Electricity and city gas continued to see double-digit growth, up 21.3 percent and 33.3 percent, respectively, the data showed.

The government plans to reduce utility bills starting this year to ease the burden on households. After crude oil prices surged amid Russia's war in Ukraine, government subsidies to oil wholesalers to bring down retail prices have helped limit the gains in gasoline and kerosene prices, up 1.6 percent and 4.7 percent, respectively.

The recent bout of inflation has complicated the BOJ's efforts to persist with its ultralow rate policy that has weakened the yen, a factor inflating import costs for resource-scarce Japan.

Core-core CPI, which excludes both energy and fresh food items, rose 3.0 percent, a level unseen since 1991.

==Kyodo

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