WORLDWIDE: HEADLINES
Japan consumer prices rise at fastest pace in nearly 2 years on fuel costs
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.
Full coverage: REUTERS
Brent crude futures snap 3-day rally in thin trade; Omicron eyed
Oil prices fell on Friday in thin, holiday trade after a three-day rally, with investors trying to gauge the Omicron coronavirus variant’s impact on demand.
Brent crude futures slid 29 cents, or 0.4%, to $76.56 a barrel by 0205 GMT, following a 2.1% gain in the previous session. The benchmark was still on track for a weekly gain of about 4%.
U.S. markets are closed on Friday for the Christmas holiday.
Oil prices have recovered this week as fears over the impact of the highly infectious Omicron variant on the global economy receded, with early data suggesting it causes a milder level of illness.
“But investors remained cautious amid surging infection cases,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
Omicron advanced across the world on Thursday, with health experts warning the battle against the COVID-19 variant was far from over despite two drugmakers saying their vaccines protected against it and despite signs it carried a lower risk of hospitalisation.
Full coverage: REUTERS
WORLDWIDE: FINANCE/MARKETS
Oil rallies on reduced fears of Omicron-induced demand slump
Oil prices bounced in a light-volume session on Thursday on signs that the worst effects of the Omicron variant might be more containable than previously feared, even as countries imposed travel restrictions on surging infection levels.
The oil market has wavered in recent days over how seriously to take the threat of another slump in fuel demand. The Omicron variant is more transmissible than previous coronavirus variants, but early data suggests it causes a milder level of illness.
Brent crude futures settled up $1.56, or 2.1%, at $76.85 a barrel, the highest close since Nov. 26, and a gain of 4.5% on the week.
U.S. West Texas Intermediate (WTI) crude futures ended up $1.03, or 1.4%, at $73.79 a barrel, to rise 4.1% on the week. Volume was light on Thursday, with just 244,000 front-month contracts trading, according to Refinitiv Eikon data, compared with a daily average of 381,000 contracts over the last 200 days.
“The demand destruction everybody thought was going to happen isn’t going to happen,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
However, some governments are imposing tighter travel restrictions to slow the spread of the variant, which could hit demand even if Omicron causes a lower level of hospitalization, particularly among the vaccinated.
Full coverage: REUTERS
