Japan Inflation

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Japan: Core inflation falls to nearly two-year low in April

May 29, 2015

In April, the core consumer price index, which excludes volatile fresh food prices, rose 0.3% over the previous month. The print was slightly below the 0.4% increase tallied in March and mainly reflected a sizeable increase in prices for clothes and footwear and, to a lesser extent, for furniture and household utensils and education.

Annual core inflation tumbled from the previous month’s 2.2% to 0.3% in April. The print slightly overshot the 0.2% that market analysts had expected. Inflation in April dropped to the lowest level since May 2013 as the impact of last year’s sales tax hike started to fade. Overall inflation fell from 2.3% in March to 0.6% in April.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell from 0.4% in April to 0.2% in May, which was in line with market expectations.

The Bank of Japan (BoJ) expects that core inflation will be between 0.2% and 1.2% in the fiscal year ending March 2016. In the following fiscal year, the BoJ sees inflation rising to somewhere between 1.2% and 2.2%. FocusEconomics Consensus Forecast panelists expect inflation of 0.7% in the calendar year 2015, which is down 0.1 percentage points from last month’s estimate. In 2016, the panel sees inflation at 1.0%.


Author: Ricard Torné, Lead Economist

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Japan Inflation Chart


Japan Inflation April 2015

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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