Japan Inflation

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Japan: Core inflation declines to nine-month low in December

January 30, 2015

In December, the core consumer price index, which excludes volatile fresh food prices, fell 0.2% over the previous month. The print, which matched the result tallied in November, mainly reflected lower prices for clothes and footwear as well as for transportation and communication.

Annual core inflation fell from the previous month’s 2.7% to 2.5% in December. The print slightly undershot the 2.6% that market analysts had expected and represented the lowest rate since March. Overall inflation stabilized at November’s 2.4% in December.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—was stable in January at the previous month’s 2.2%, which matched the result that market analysts had expected.

The moderation observed in inflation since the second half of 2014 has added more pressure to the Central Bank to expand further the Bank’s quantitative and qualitative monetary easing program.

The Bank of Japan (BoJ) expects that core inflation will be between 0.4% and 1.3% in the fiscal year ending March 2016. In the following fiscal year, the BoJ sees inflation rising to somewhere between 1.5% and 2.3%. FocusEconomics Consensus Forecast panelists expect inflation of 1.3% in the calendar year 2015, which is down 0.2 percentage points from last month’s estimate. In 2016, the panel also sees inflation at 1.3%.


Author: Ricard Torné, Lead Economist

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Japan Inflation December 2014 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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