Japan: Core consumer prices continue to fall in June
July 27, 2012
In June, the core consumer price index, which excludes volatile fresh food prices, fell 0.3% in seasonally adjusted terms over the previous month. The decline followed May's 0.2% drop and marked the steepest fall since July 2010. According to the statistics bureau, lower prices were seen almost across the board, particularly in the transportation and communication as well as in the culture and recreation categories. As a result, core consumer prices declined 0.2% in June over the same month last year, which was below both the 0.1% drop seen in May and market expectations that had inflation remaining flat. Meanwhile, overall consumer prices fell 0.1% in June over the same month last year, contrasting the 0.2% rise recorded in May. 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 0.6% in July over the same month last year. The print mirrored the previous month's result and matched market expectations. 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%.