Japan Inflation April 2016


Core prices continue to drop in April

In April, the core consumer price index rose 0.3% compared to the previous month, which was above the 0.1% rise tallied in March. The print mainly reflected much higher prices for clothes and footwear, furniture and household utensils and, to a lesser extent, education.

Core prices in April were down 0.3% over the same month last year, which matched the result tallied in the previous month. The print was above the 0.4% decrease predicted by market analysts and represented the steepest drop since April 2013. Overall consumer prices in April fell to a 0.3% decline from a 0.1% decrease in March.

Core prices for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell 0.5% in May over the same month of the previous year (April: -0.4% year-on-year), which was in line with the result that market analysts’ had expected.

The Bank of Japan (BoJ) expects that core inflation will be between 0.0% and 0.8% in the fiscal year ending March 2017. In the following fiscal year, the BoJ sees inflation between 1.8% and 3.0% and somewhere between 0.8% and 2.0% when excluding the effects of the expected consumption tax hike in April 2017. FocusEconomics Consensus Forecast panelists expect inflation of 0.3% in the calendar year 2016, which is unchanged from last month’s estimate. In 2017, the panel sees inflation at 1.6%.

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Japan Inflation Chart

Japan Inflation April 2016 0

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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