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Japan: Core inflation picks up slightly in March

April 30, 2015

In March, the core consumer price index, which excludes volatile fresh food prices, rose 0.4% over the previous month. The print contrasted the 0.1% drop tallied in February and mainly reflected a sizeable increase in prices for clothes and footwear and, to a lesser extent, for culture and recreation as well as for fuel, light and water charges.

Annual core inflation inched up from the previous month’s 2.0% to 2.2% in March. The print overshot the 2.0% that market analysts had expected. Overall inflation increased slightly from 2.2% in February to 2.3% in March.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—fell sharply from 2.2% in March to 0.4% in April, which was a tad below the 0.5% that market analysts had expected. Inflation dropped markedly in April as the impact of last year’s sales tax hike has started to fade away.

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 March 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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