Japan Inflation


Japan: Core inflation slows to nearly one-year low in February

March 27, 2015

In February, the core consumer price index, which excludes volatile fresh food prices, fell 0.1% over the previous month. The decrease was above the 0.6% drop tallied in January and mainly reflected sharp declines in prices for clothes and footwear as well as for transportation and communication.

Annual core inflation slowed from the previous month’s 2.2% to 2.0% in February. The print slightly undershot the 2.2% that market analysts had expected and represented the lowest rate since March 2014. Overall inflation declined from 2.4% in January to 2.2% in February.

Core inflation for Tokyo—available one month in advance of the national figures and thus a leading indicator for countrywide inflation—remained at 2.2% in March for the fourth consecutive month, which was in line with the result that market analysts had expected.

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 Chart

Japan Inflation February 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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