© Reuters. FILE PHOTO: Workers are seen in a building undergoing construction at Mexico City, Mexico January 30, 2020. REUTERS/Andres Martinez Casares

MEXICO CITY (Reuters) – The Mexican economy unexpectedly shrank by 0.2% in October from the previous month, as the country’s faltering recovery from the impact of the COVID-19 pandemic dragged into the fourth quarter, official data showed on Friday.

October’s seasonally-adjusted contraction was the third month-on-month decline in economic activity in a row, figures from national statistics agency INEGI showed.

A Reuters poll of analysts had forecast the economy would grow by 0.8% during October following a disappointing third quarter in which gross domestic product (GDP) shrank by 0.4%.

Compared to the same month last year, the economy grew in October by 0.3% in seasonally-adjusted terms. In unadjusted terms it shrank by 0.7%, the INEGI data showed.

Mexican business operations have been disrupted by bottlenecks in international supply chains, which have led to temporary work stoppages in industries including carmaking, a pillar of the country’s export-driven manufacturing sector.

But a breakdown of the INEGI figures showed the contraction in October was led by weakness in tertiary activities, which cover services, and by primary activities, which encompass farming, fishing and mining.

Primary activities shrank by 1.2% from September, while tertiary activities were down by 0.5%. By contrast, secondary activities, which include manufacturing, rose by 0.6%.

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© Reuters. FILE PHOTO: Shoppers wearing protective face masks, following an outbreak of the coronavirus disease (COVID-19), are seen at a supermarket in Tokyo, Japan March 27, 2020. REUTERS/Issei Kato/File Photo GLOBAL BUSINESS WEEK AHEAD

By Takahiko Wada and Leika Kihara

TOKYO (Reuters) -Japan’s November consumer inflation marked the biggest year-on-year rise in nearly two years on surging fuel costs, a sign that the fallout from global commodity price gains is broadening.

The increase, however, is unlikely to prompt the Bank of Japan (BOJ) to withdraw monetary stimulus any time soon, with inflation still distant from the central bank’s 2% target, analysts say.

The data released on Friday highlights the fresh challenge policymakers face in preventing rising costs of living from hurting already weak household spending and Japan’s fragile economic recovery.

BOJ Governor Haruhiko Kuroda said on Thursday a weak yen could be inflicting bigger pain on households than before by pushing up prices of imported goods.

“Faced with price hikes for a range of daily necessities, consumers may become even more cautious in boosting spending,” said Yasunari Ueno, chief market economist at Mizuho Securities.

Japan’s core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, rose 0.5% in November from a year earlier, government data showed, exceeding a median market forecast for a 0.4% gain.

It was the biggest increase since February 2020 and followed a 0.1% rise in October.

The gain was driven by a 15.6% surge in energy costs. Food costs also rose 1.4%, indicating households were facing higher grocery costs even when wage growth remains slow.

Core consumer inflation is already above 1% when stripping away the impact of this year’s cuts in cellphone charges, which knock off 1.5% point off the index, analysts say.

“We expect underlying inflation to accelerate to a peak of around +1.0% next year as goods inflation rises further and the drag from mobile phone tariff cuts drops out of the annual comparison,” said Tom Learmouth, Japan economist at Capital Economics.

Japan has not been immune to global commodity inflation, with wholesale prices rising a record 9.0% in November from a year earlier.

But core consumer inflation has hovered around zero, as firms remain cautious about passing on costs to consumers on concerns that households may hold back on spending.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

© Reuters. FILE PHOTO: Shoppers wearing protective face masks, following an outbreak of the coronavirus disease (COVID-19), are seen at a supermarket in Tokyo, Japan March 27, 2020. REUTERS/Issei Kato/File Photo GLOBAL BUSINESS WEEK AHEAD

By Takahiko Wada and Leika Kihara

TOKYO (Reuters) – Japan’s core consumer prices rose 0.5% in November from a year earlier, government data showed on Friday, marking the fastest pace of increase in nearly two years in a sign that the fallout from global commodity price inflation is broadening.

The increase, however, is unlikely to prompt the Bank of Japan (BOJ) to withdraw monetary stimulus any time soon, with inflation still distant from the central bank’s 2% target, analysts say.

The rise in the nationwide core consumer price index (CPI), which excludes volatile fresh food but includes oil costs, was bigger than a median market forecast for a 0.4% gain.

It marked the biggest increase since February 2020 and followed a 0.1% rise in October.

The so-called ‘core-core’ inflation index, which excludes both food and energy prices and is comparable to the core price index used in the United States, fell 0.6% in November from a year earlier.

Japan has not been immune to global commodity inflation, with wholesale prices rising a record 9.0% in November from a year earlier.

But core consumer inflation has hovered around zero, as firms remain cautious about passing on costs to consumers on concerns that households may hold back on spending.

The BOJ maintained an ultra-loose interest rate policy last week, and governor Haruhiko Kuroda stressed his readiness to keep rates low, even as other major central banks head for an exit from crisis-mode stimulus measures.

Japan has lagged other countries in staging a strong rebound from last year’s pandemic hit to the economy, with its gross domestic product shrinking an annualised 3.6% in July-September due to weak consumer spending and output hit by a spike in coronavirus infections and supply constraints.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.