Japan Inflation


Core consumer prices rise in August

In August, the core consumer price index, which excludes volatile fresh food prices, added 0.1% over the previous month. The reading contrasted the 0.2% price drop seen in July. Higher prices for culture and recreation as well as for transportation and communication offset lower prices for clothing and footwear. Despite the monthly price increase, core consumer prices dropped 0.3% over the same month last year, which mirrored the result observed in July. The result came in a notch below market expectations that had core prices declining 0.2%. Meanwhile, overall consumer prices fell 0.5% over the same month last year, which was also a notch below the 0.4% fall seen in July. The core consumer price index for Tokyo, which is available one month before the national figures and thus is a leading indicator for countrywide inflation, fell 0.4% in September over the same month last year (August: -0.5% year-on-year). The decline overshot market expectations that had the index falling 0.3%. According to the median of the Central Bank Policy Board members forecast, core inflation will average 0.2% in the 2012 fiscal year ending in March 2013. In FY 2013/14, the Bank of Japan sees core inflation at 0.7%.


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Japan Inflation Chart

Japan Inflation August 2012

Note: Year-on-year and month-on-month var. of consumer price index in %.
Source: Statistics Bureau (SB) and FocusEconomics calculations.

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