Japan Inflation


Core prices continue to rise in March

In March, the core consumer price index, which excludes volatile fresh food prices, rose 0.3% over the previous month. The reading followed the 0.1% increase recorded in February and marks, in fact, the fastest monthly rise in a year. Core prices were mostly affected by higher prices for clothes and footwear as well as for culture and recreation.

However, core consumer prices declined 0.5% compared to the same month last year. The print exceeded both the 0.3% drop seen in February and the 0.4% decline foreseen by market analysts. Meanwhile, in March, overall consumer prices fell 0.9% over the same month last year, which came in below the 0.7% fall seen in February.

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 0.3% in April over the same month last year. The print was above both the 0.5% decline seen in March and market expectations that had prices falling 0.4%.

The Bank of Japan expects consumer prices to rise between 0.4% and 0.8% this fiscal year ending March 2014. In the following fiscal year, the BoJ sees inflation accelerating to between 2.7% and 3.6%. FocusEconomics Consensus Forecast panellists expect consumer prices to remain flat in 2013, which is up 0.1 percentage points from last month's estimate. In 2014, the panel sees inflation at 1.6%.

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Japan Inflation Chart

Japan Inflation March 2013

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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