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Japan prices jump on energy costs, industrial production down

Japan prices jump on energy costs, industrial production down

Rising energy costs triggered the biggest jump in Japanese consumer prices in almost a decade while industrial production slumped, the government said Friday, clouding the outlook for the world's No. 2 economy.
The nation's jobless rate unexpectedly fell to 3.8 percent in November, but overall the mixed data cements expectations that the Bank of Japan will keep interest rates unchanged for some time, even as energy-fueled inflation accelerates.
The nationwide core consumer price index, which excludes volatile fresh food prices, jumped 0.4 percent in November compared to the same month a year ago, the Ministry of Internal Affairs and Communications said.
The reading was above analysts' expectations and marked the fastest rise since a 1.8 percent increase in March 1998. It was also the index's second straight month of gains following a 0.1 percent rise in October.
The core CPI was lifted by a 5.4 percent jump in energy prices. Gasoline prices surged 10.8 percent on year.
"The rise in prices involves higher oil prices, and so it's not a favorable increase," economy minister Hiroko Ota told reporters.
The Bank of Japan has looked for a rise in consumer prices as a sign the country has fully emerged from years of deflation, a continuous spiraling down of prices that deadens economic activity and brings down wages.
Still, the central bank has been cautious to hike rates too quickly amid concerns over the U.S. subprime loan crisis and the possible impact of the global economic slowdown on Japan's economy.
The Bank of Japan kept its key interest rate unchanged at 0.5 percent at its policy meeting earlier this month, still the lowest rate among major industrialized countries.
Industrial production, meanwhile, fell 1.6 percent in November from the previous month, the first drop in two months.
Industrial output rose 1.7 percent in October after falling 1.4 percent in September, the Ministry of Economy, Trade and Industry said.
The ministry also said manufacturers polled expect that their output will rise 4.0 percent on month in December, but will be flat in January.
Offering some respite was an unexpected drop in the country's jobless rate to 3.8 percent in November from 4.0 percent a month earlier.
The Ministry of Internal Affairs and Communications said the total number of jobless was down 130,000 on year, marking the 24th consecutive month of decline.