Japan’s inflation rate held steady in November, official data showed Friday ahead of the Bank of Japan’s monetary policy decision which could see central bankers raise interest rates to their highest level in 30 years.The hike would be the first since January and could potentially exacerbate turmoil in debt markets.Yields on Japanese government bonds have risen in recent weeks on worries about Prime Minister Sanae Takaichi’s budget discipline, while the yen has weakened.The core consumer price index — which excludes volatile fresh food — rose three percent in November, the same rate as a month earlier, in line with market expectations.Takaichi, who formally took power in October, has promised to fight inflation as a major priority.Her government succeeded in getting parliament approval for an extra budget worth 18.3 trillion yen ($118 billion) this week to finance her massive stimulus package.She has long advocated for more government spending and easy monetary policy to spur growth.Since taking office, however, she has said monetary policy decisions should be left to the Bank of Japan (BoJ).The BoJ began hiking rates from below zero in March last year as figures signalled an end to the country’s “lost decades” of stagnation, with inflation surging.However, with worries about the global outlook and US tariffs growing, the bank paused its tightening measures at the start of 2025, with the last increase in January taking rates to their highest level in 17 years.The inflation figures for November showed rice prices up 37 percent year-on-year, the internal affairs ministry said. Rice prices have skyrocketed because of supply problems linked to a very hot summer in 2023 and panic-buying after a “megaquake” warning last year, amongst other factors.Japan’s economy contracted 0.6 percent in the third quarter, but BoJ governor Kazuo Ueda said last week that the impact of US tariffs was less than feared.“So far, US corporates have swallowed the burden of tariffs without fully passing (them) through to consumer prices,” Ueda told the Financial Times.At the same time, inflation has been above the BoJ’s target of two percent for some time.The majority of economists polled by Bloomberg expect the BoJ to raise its main rate from 0.5 percent to 0.75 percent, which would be the highest since 1995.

Consumer confidence edged up ahead of Christmas but remains subdued in the face of cost-of-living pressures, according to new figures.

GfK’s long-running Consumer Confidence Index improved by two points to minus 17 for December.

The research showed that all five of the survey’s measures increased for the month, bouncing back from a weak November which had been impacted by pre-Budget caution.

Neil Bellamy, consumer insights director at GfK, said: “It’s tempting to see festive cheer in December’s two-point improvement in consumer confidence.

“This is a surprise finding for the UK high street because it contrasts with the Black Friday sales slump we reported on earlier this month.”

Industry data pointed to weakness on the high street earlier in the run-up to Christmas, the data from the CBI showing the sharpest fall in sentiment among retailers for 17 years.

The GfK figures showed a four-point improvement in its major purchase index – an indicator of confidence in buying big ticket items – to minus 11.

Measures related to shoppers’ views about the wider economic outlook also improved slightly for the month.

Mr Bellamy said: “UK households still face cost-of-living pressures, despite the recent softening in inflation, along with rising economic uncertainty, and those conditions result in weaker consumer confidence.

“Sadly, consumers resemble a family on a festive winter hike, crossing a boggy field – plodding along stoically, getting stuck in the mud and hoping that easier conditions are not far off.”