Japan Inflation


Japan: Core inflation falls to five-month low in August

September 26, 2014

In August, the core consumer price index, which excludes volatile fresh food prices, was flat over the previous month. August’s result, which came in below the 0.1% increase recorded in July, mainly reflected that much higher prices for culture and recreation and transportation were offset by lower prices in most of the remaining sub-categories.

Annual core inflation inched down from the previous month’s 3.3% to 3.1% in August. The print undershot the 3.2% reading that the market had expected and represented the lowest rate since March. Overall inflation ticked down from 3.4% in July to 3.3% in August.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—inched down from 2.7% in August to 2.6% in September, which matched the result that market analysts had expected.

The Bank of Japan (BoJ) expects that core inflation will be between 3.2% and 3.5% in the fiscal year ending March 2015. In the following fiscal year, the BoJ sees inflation falling to somewhere between 1.9% and 2.8%. FocusEconomics Consensus Forecast panelists expect inflation of 2.7% in the calendar year 2014, which is up 0.1 percentage points from last month’s estimate. In 2015, the panel sees inflation at 1.7%.

Author: Ricard Torné, Head of Economic Research

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Japan Inflation Chart

Japan Inflation August 2014

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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