TOKYO, Reuters – Japan’s core inflation was at a nearly two-year high in December due to rising fuel and material prices. A Reuters poll on Friday showed that households are still paying more.

Japan’s inflation is far less than those of major economies like the United States. In the United States however, strong demand and a tight employment market have pushed up prices so much that the central bank has decided to increase its interest rates.

According to the survey of 18 economists, the nationwide core consumer price index will likely rise 0.6% by December from last year.

This would be the fastest rate of growth since February 2020, and more than 0.5% in November.

Takeshi Minami (chief economist, Norinchukin Research Institute) stated that although Japan’s prices have been low, we are seeing the effects of rising import costs and weaker yens.

Also, the poll showed that Japan’s December exports increased 16.0% in comparison to the prior month. This marks the 10th consecutive month of expansion.

The poll shows that December will see an increase of 42.8% in imports due to rising raw material and energy costs.

The poll indicated that core machinery orders rose 1.4% in November compared to the previous month. This is a good sign for capital spending.

CPI data will be released by the government at 8:30 AM on January 21 (2330GMT on Jan. 20, 2350GMT on Jan. 19, and trade data data at 8 :50 AM on Jan. 20 (2350GMT on Jan. 19). Data on machinery orders data will also be available at 8:50 AM on Jan. 17, (2350GMT on Jan. 16).